Vinoth,
There are many ways to calculate vitality, so you need to define vitality in a way that makes sense for your industry. In the consumer products industry, cannibalization is "good" if the new product offering increases profit margin. In this case, including cannibalization volume in your vitality index makes sense.
If a new product offering is primarily to create brand "news", but not necessarily to grow the business - as frequently is the case in food and beverage - cannibalization is fine, but I wouldn't include it in vitality index measures. A good analogy would be "today's special" at a restaurant. In this case, the objective is most often to drive brand loyalty to the restaurant, rather than grow margin per customer.
I have some specific examples of both cases if you want to reach out.
Wayne
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Wayne Fisher
Innovation Guide
Rockdale Innovation LLC
Cincinnati OH
513-708-2492
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Original Message:
Sent: 12-13-2019 14:58
From: Vinoth Chandran
Subject: Vitality index
Hello,
I am looking to information/material to understand how cannibalization that a new product creates ties into measuring its vitality index for the organization. if any one has any information, pl let me know
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Vinoth Chandran
Sr. Director Product development/PMO
Woodstream Corporation
Lititz PA
7176262125
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