Product Overlap Strategy

Companies often develop product strategies when operating in the business environment. Products represent the items a company sells to consumers in hope of making a profit. Product overlap strategies occur when a company sells similar goods.

Defined

Companies experience product overlap by selling similar products to consumers or purchasing a competitor that results in two similar items sold through one company. While this can be a difficult issue to correct, it may not be completely negative for the company.

Function

Product overlap strategies can include selling similar goods in different markets, regions or international countries. For example, a company may sell widgets and cogs; both offer extremely similar consumer benefits. However, the company may sell widgets in the United States and cogs in Canada.

Significance

Consumer demand is often linked to product overlap strategies. Preferences for each product may justify sales of each product, until the production of both items becomes difficult to maintain. Companies may decide to kill one product and sell the other; the remaining product is typically the most profitable.

References

• The Opinionated Marketers: Split Personalities: What to Do When Your Products Overlap