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Product Cannibalization

When I was in business school, we had some interesting exercises on marketing ROI and cannibalization. I still recall the exercises about sales of two product lines in a company and the results of a marketing campaign. What was the net return on the marketing investments, and what if one of the product lines lost sales, while the other one increased the sales?

Good examples and a good exercise to think a couple of steps ahead.

Cannibalization is an important topic. Sometimes it is the actual objective with a campaign, for example when introducing a new product. But more often you want to avoid it.

At Musqot, we had some interesting discussions with a few customers about this. Although they could track the sales of the different products, the challenge was to connect the sales with the specific marketing activities to quickly understand the impact. After discussing about these issues, we helped them to keep track of the sales of the relevant products on a daily basis.

In the Musqot performance view, they could then connect the sales with the marketing activities, and directly spot any potential cannibalization. As soon as they realized a potential problem with cannibalization, they could redirect the marketing activities and also understand the operational impact of any changes.

If you want to learn more about this topic, just reach out to us. We are looking forward to an interesting discussion where we can share ideas and experiences.

 

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