How to Avoid Cannibalization: A Strategic Approach

Product cannibalization can have negative consequences for retailers, but by taking proactive steps, it's possible to minimize its impact. In this lesson, we'll explore effective strategies to mitigate the risks associated with cannibalization and make informed decisions about new product introductions. Let's dive in!

  • Market Segmentation and Positioning:
    • Analyze the market carefully and identify specific segments for each product in your portfolio.
    • Understand your market positioning to make informed decisions when introducing new products.

  • Analyzing Demand Forecasts:
    • Evaluate short- and long-term market demand forecasts before launching new products.
    • Consider the potential impact of a new product on overall revenue and sales units.

  • Data-Driven Basket Analysis:
    • Conduct a comprehensive data-driven basket analysis to identify cannibalization and complementary products.
    • Utilize big data to uncover hidden sales cross dependencies within your product portfolio.

  • Unique Product Features:
    • Identify unique product features that customers desire and ensure new products include these features.
    • Differentiate your offerings by providing products with distinct characteristics to minimize the risk of decreasing sales for existing products.

  • Protecting Key Value Items (KVIs):
    • Identify and safeguard the key value items (KVIs) within your portfolio.
    • Establish a clear boundary to protect products or categories crucial to your business's success from cannibalization risks.

By implementing these strategies, you can minimize the risks associated with product cannibalization, protect your core products, and make informed decisions about new product introductions. These steps will help you navigate the dynamic retail landscape and foster business growth.

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