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By Chad McAllister

Niche Strategy and Product End-of-Life

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A friend approached me the other day asking for a quick brainstorming session.  Since he offered to by lunch I hardily agreed.

The business is a specialty publishing business that has a niche in the children’s book world of publishing.  They currently control the niche pretty well and want to continue to do so.

Those that follow a niche strategy are very intimate with their customers. They know them inside and out and will do anything to continue to be the provider of choice – including new products, product improvements, repositioning of products, etc.  They are worried about current customers of a product line they want to kill.

So the problem:  One of the product lines is becoming dated.  It has served both the organization and customers well for over 10 years.  10,000 customers still use the product.  The products are used to teach pre-school courses.  Materials are typically purchased by pre-schools on a quarterly basis.   The plan is that the existing product plays out in the spring of 2011 with the new product lunch also for Spring/Summer 2011.

The product manager believes it is time to kill the product line and produce an up-to-date line for the same market.  However, as a niche player the manager does not want to alienate the 10,000 customers and/or give them an opportunity to choose a competitor product.

Possible solutions have been generated.  But what are the criteria against which they should evaluate the solutions?

Here’s my list:

  • New product’s fit to strategy?
  • Sales and revenue projections for new product?
  • Current product’s place on the product lifecycle curve?
  • Cost to maintain the current product to serve existing customers for another year? Two years?
  • Problems/costs if existing product is killed?
  • Cannibalization factors – if any?
  • Enticement costs for a program to convert current customers?  Projected success of program?
  • Strengths and weaknesses of competitors?
  • Progress including customers in change effort?

 

I would love feedback on what you would add (or delete)?  My friend awaits.  Help!

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Filed Under: Concepts

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Chad McAllister - Product Management and Innovation TrainingThe primary responsibilities for an organization are product management and innovation. They deliver value to customers. They're also exciting responsibilities for those properly equipped. That is my job - equipping product managers and innovators.
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