Tuesday, June 23, 2009
Quick--before a competitor comes along to eat your lunch, be the first to cannibalize your own products. If customers are going to move on in search of the new new thing, be sure it's your new thing.
That's the philosophy of successful marketers like Gillette and Apple. Reading "5 Reasons Gillette Is the Best a Brand Can Get" reminded me of this important principle. Gillette brings out improved razors every few years and then communicates the benefits of the new model over and over again to drive buyers to the new. Take a look at the Gillette Fusion Power Phenom page, featuring all the flavors of Fusion. Naturally the new product is priced higher than the old product--and buyers need to buy new blades for years and years, a steady source of revenue that stretches to the horizon and beyond.
Consumer packaged goods and high-tech products have entirely different lifecycles, yet the cannibalization principle is the same. Apple has prospered launching new, improved iPods in quick succession, prompting many current customers to trade up to the latest models. The company is relentless in its cannibalization of its own products, beating competitors to the punch time after time. And Apple beats back competition with its App Store secret weapon, another steady source of revenue that stretches to the horizon and beyond.
In Poland, Tesco introduced a range of "Discounter" products at lower prices to cannibalize its own grocery merchandise as competitors such as Aldi and Lidl were drawing interest from bargain-hunting consumers. The message to shoppers was: "No reason to go to discounters."
So go ahead and cannibalize before your competitor eats your lunch. Just be sure you know your customers well enough to introduce something with extra value they can't resist and can't get anywhere else.