Use caution with cannibalization

If you want to be a bad product manager, make sure no other products from your company can possibly cannibalize your sales. You are responsible for your product, and you must protect it at all costs. Other product managers responsible for other products may try to capitalize on your success and steal your customers — don’t let them! If anyone else in the company even tries to create a product that comes remotely close to yours, make sure they know to back off. If you’re using shared components across multiple products, fight to get get as much functionality in your product and as little as possible in the other products. Your job is to make your products successful, not to make other product managers look good.

If you want to be a good product manager, carefully analyze the potential impact before crying cannibalization. In a broad sense, it’s possible for any product to cannibalize any other one. Obviously, the more similar the products are, the more there is possibility of one product being purchased as a replacement for another. A scientific calculator could be a good substitute for a financial calculator in many situations; a calculator designed for an elementary school math student would likely not be.

Imagine you are product manager for a line of scanners. You’ve just found some new technology that decreases the device’s start-up time and can complete scans quicker. You’re working on launching your next version of scanners with this innovation when you’re approached by another product manager in your company who is responsible for multifunction devices, which scan, fax, copy, and print. He wants to use the new scanner technology you’ve developed in the next version of the multifunction devices.

Your initial reaction is probably to resist, since this innovation will give you a leg up against your competition and you don’t want his products to cut in to that. However, it’s important to analyze the situation:

• Your products may serve different markets. If scanners are sold to businesses and schools and multifunction devices are sold to consumers, there may be little potential for cannibalization.
• Your products may have different distribution channels. If scanners are sold through sales representatives and multifunction devices are sold through retail outlets, there is less chance of competing directly.
• The benefits may be of varying importance in different products. Quick scanning may be important when the device is a dedicated scanner and used dozens of times a day, but less important if it is used only a few times a week in a multifunction device.
• There should be other benefits to your product other than just the shared component. If “quicker scanning” is the only advantage you would have over the multifunction device, you may be in trouble. Likely, you have additional features which provide different benefits than similar products produced by your company. While the multifunction device can copy, fax, and print, your scanner may have a larger scanning surface, better resolution, ability to scan objects that are not flat, and come bundled with better software. You need to make sure that those other benefits are clear to customers who may be thinking about choosing the multifunction device over your scanner.

While product managers are responsible for the success of their products, if you work for a company that has more than one product (and you likely do), you need to also consider the overall success of the company. Sometimes that means giving up a little bit on your product to provide a big boost to another product. When product management responsibilities are centralized in one department or group within the organization, it is easier to coordinate trade-offs and create an overall portfolio strategy. When product management is spread out in different divisions, it is more difficult but still not impossible.

As a product manager, you need to look out for your product but also work with other product managers to help make their products successful. Others will recognize your efforts and begin to return the favor if they are not already doing so. Management will recognize your commitment to overall company success — not just success of your products at the expense of everyone else — and know you help to create an even greater amount of value for your customers and your organization.