Having a wide range of products can win you a large market share during the early days but is it sustainable? Many entrepreneurs tend to be more product-oriented and therefore focus and channel more resources into product innovation without assessing the typical market needs.
Even though a large product portfolio may enable you accommodate forces from the business environment better, it reduces a company’s efficiency and in many times causes its products to compete amongst themselves.
“Product Cannibalization is the reduction in a product’s market share, sale volume or sales revenue due to the introduction of a new product from the same company”.
The brands compete for production quantities and compete for buyers when their value propositions are not clearly defined.
When consumers can’t find their favorite product on the shelf your competitor wins, when you can not keep up with production, your competitor wins.
It is vital that every brand developed meets a specific market need and strategically fit into the company’s long term goals.
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