How do you avoid cannibalizing your existing products with extensions?

1 Identify your goals

Before you launch a product extension, you need to have a clear idea of what you want to achieve with it. Do you want to attract new customers, increase loyalty, differentiate from competitors, or fill a gap in the market? Depending on your goals, you may need to adjust your extension strategy, such as choosing a different product category, price point, distribution channel, or positioning. For example, if you want to reach a new segment, you may need to create a product extension that appeals to their needs, preferences, and values, while maintaining some connection to your core brand.

2 Analyze your market

Another key step to avoid cannibalization is to understand your market dynamics and customer behavior. You need to research how your existing products are performing, who are your target customers, what are their needs and wants, how do they perceive your brand, and what are the opportunities and threats in the market. You also need to evaluate your competitors and their product extensions, and how they may affect your market share and positioning. By doing this, you can identify the gaps and niches where you can introduce a product extension that will complement rather than compete with your existing products.

3 Test your extension

Before you launch your product extension, you need to test it with your potential customers and get their feedback. You can use various methods, such as surveys, focus groups, interviews, or experiments, to gauge their reactions, preferences, and purchase intentions. You can also test different aspects of your extension, such as the name, design, features, benefits, price, or packaging. By testing your extension, you can validate your assumptions, measure its appeal and fit with your brand, and identify any potential issues or risks that may lead to cannibalization.

4 Monitor your results

After you launch your product extension, you need to monitor its performance and impact on your existing products. You can use various metrics, such as sales, profits, market share, customer satisfaction, loyalty, or retention, to evaluate how your extension is doing and how it is affecting your core offerings. You can also track the feedback and reviews from your customers and the media, and see how they perceive and value your extension. By monitoring your results, you can identify any signs of cannibalization and take corrective actions if needed, such as adjusting your marketing mix, pricing strategy, or distribution channels.

5 Innovate and differentiate

Finally, to avoid cannibalization, you need to constantly innovate and differentiate your products and your brand. You need to keep up with the changing customer needs, preferences, and expectations, and offer them solutions that meet or exceed their demands. You also need to create a distinctive and consistent brand identity and image, and communicate your value proposition and benefits clearly and effectively. By doing this, you can create a loyal customer base, enhance your competitive advantage, and reduce the chances of cannibalization.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?