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Saks Gloweli Business Tip – Cannibalize your own Sales

Saks Gloweli Business Tip - Cannibalize your own Sales

Cannibalization is the disminishment of the sales of one’s own product through the introduction of a competing product. But it is better to suffer a loss at one’s own hands than to have a competitor introduces a product that takes away those same sales.

Putting an improved product on the market does not necessary mean your older product must be discontinued. Because development, tooling and other costs for the older products have been covered, the old product can be sold at a considerably lower price than the new product, giving the customers the option of buying the old product at a low price or the new product at a higher price. It is important, however, that the new product offers something that the older one does not in order to prevent confusion  or resentment among customers.

By Sid Mewara, Managing Director, Saks Gloweli Consulting Saks Gloweli Consulting is a management strategy consulting firm based out of Shenzhen and Hong Kong that helps clients grow their business www.saks-gloweli.com



2 Comments for “Saks Gloweli Business Tip – Cannibalize your own Sales”

  1. I am sure if you were Apple or Samsung this would be relevant advice, but, I’m guessing they already know this brilliant stuff. What if you owned a bar that really was just average but there weren’t many places in the area to go and then you decided to start two more in the same area with the same population density and no year on year change in the ratio of foreign customers, would that qualify as cannibalization and how would it affect the sales of the first bar? Now this could be relevant and finally make these articles worth a darn.

    • I could provide a nice case study for that. I won’t, but this tip still applies in that instance.

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The Contributor

Saks Gloweli is a Management Strategy Consulting and Financial Advisory firm specializing in China and Asia Pacific, guiding global and Chinese companies to growth and profitability. SG has been in operation in China and Hong Kong and celebrates Shenzhen as a central hub of growth for China and the rest of the world.

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