I wonder how many people can make the intended reference.
If you connected liver, fava beans and chianti to Dr. Hannibal Lecter, then you’re certainly bright in my books.
Just yesterday, I received a questionaire as part of my interview process for a marketing position. One of the questions read: “What do you think is the most difficult part of ‘Marketing’ from the point management decides to add a particular product to their existing product line?”.
I answered managing the cannibalization of the existing products in the line is probably the most challenging and difficult aspect of marketing.
If you push out a new product, you obviously want people to purchase it. At the same time you wouldn’t want the sales of your older products to suffer.
Let’s take a look at the basic principles from a case study of two companies. Their products do not go through the traditional product life cycle but the basic principles to prevent market share cannibalism within a product line are there still.
I think taking a look at the way Microsoft and Apple does their operating systems.
First, the Windows operating system.
In the past, the software giant has dealt with this problem rather poorly.
New operating systems offered little differentiating features. The reasons for switching to the new OS is not compelling. People can get by whether they are using the new version or the old.
That said, the problem back then didn’t actually affect their performance as a company that significantly though – I guess that’s the perk of being the acting monopoly in the market.
More recently however, they are addressing the issue much better. Creating versions of their operating system that are vastly different than the predecessors thus maintaining both versions’ functionality and uniqueness.
The usability of both Vista and 7 are still high. Both are unique but the key is that Microsoft is phasing out the older systems.
|Beautiful picture from National Geographic (check them out here)|
The large cat motif is rather fun when it comes to branding the big A’s flagship operating system. Historically they have used: Cheetah, Puma, Jaguar, Panther, Tiger, Leopard, Snow Leopard, and Lion.
The brilliance of the OS product manager is that upgrading to the new iteration is so simple for users and often inexpensive in the grand scheme of things.
The difference with the big A is that with the efficient distribution system, they aim to bring all the users of the old OS onto the new one. In essence cannibalization of the market share becomes replacement.
In the bigger picture though, cannibalization isn’t too big of a factor here because the two products are still within the same company. Overall, the market share of the company may actually increase due to the new product.
My next post will revisit this topic. Look forward to it.