February 22, 2017

Starting A New Product Line

There are more options than I am going to provide here, ok?

When launching a new product line, most of us would likely take one of two approaches.
  1. Encourage our existing customer base to purchase from the new product line.
  2. Start a new business, and find new customers to purchase the new product line.
Either strategy can work, no doubt about it.

When we encourage our existing customer base to purchase from the new product line, there are a handful of choices we make.
  1. The new product line can integrate with the existing product line. Think about getting oil changes from the dealership you purchased your car from - the oil change product line does not cannibalize purchasing of the car. Here, the existing customer base is the target audience, and the goal is to get customers to maintain spend in one category while adding spend in the other category.
  2. The new product line can complement the existing product line. In this case, we might offer a more expensive version of an existing item (or cheaper). This is a classic Foxes/Rabbits scenario ... the new product line is a Fox, and it requires a healthy supply of Rabbits to survive.
  3. The new product line is designed to kill off the existing product line. This is not technically a Foxes/Rabbits scenario, it's more of a Rabbits/Rabbits scenario. Think of Windows 10 killing off Windows 8 as an example.
  4. The new product line can be completely independent of the existing product line. This would be like Best Buy selling washing machines - in theory, washing machines should not interfere with the purchase of a 65" television, right?
In my experience, most of us try to implement a version of (2). We want it both ways. We want the existing product line to succeed, and we want the new product line to succeed, so we market the new product line to the customer base purchasing the existing product line.

This is where we get ourselves into trouble.

We need to do everything possible to protect the existing product line in the short-term, until the new product line can survive independent of the existing product line (or until it can replace the existing product line). This means that we need to provide a ton of Rabbit Food (marketing) to grow the existing product line so that there are a ton of customers who might consider the new product line.

Of course, we don't always do this, do we?

So give your existing product lines some thought when introducing new merchandise - we need to protect (and grow) the old assortment so that the new assortment has a chance of being successful.

Agree or disagree?