Know-How Exchange : Strategy

You are not the first person to face this dilemma. The answer, though, goes back to the underlying premise. WHY do you want to increase sales of your private label brands in June?

If the private label brands are more profitable than your other branded items, then you shouldn't really care about cannibalization. You'll make more money every time your salespeople succeed in switching a customer to the private label brand.

If the private label brands are not more profitable than your other branded items, there must be some reason why you want to push private label in June. What is that reason? Maybe the not-so-obvious reason is worth whatever cannibalization you experience. Or maybe you need to re-think the objective.

If I were a salesperson who earned a spiff for selling private label (in June), you can be sure I would make every effort to switch customers from branded items to private label ... without regard for whatever cannibalization would occur.

Somehow you have to answer the obvious questions of a thinking sales rep: "What's in it for me to maintain branded volume while I push private label? For that matter, what's in it for MANAGEMENT for me to push private label? Why a spiff on an item if you don't want me to push it? And if you want me to push regular branded goods too, why isn't there a spiff on that?"

It sounds like your management wants to increase TOTAL sales, and putting a spiff on private label sounded like a good way to do that ... as long as any increase in private label sales doesn't cannibalize too much branded merchandise.

I can't think of any good way to spin this sow's ear into a silk purse. Maybe just let nature run its course. Maybe your salespeople will discount the spiff altogether and sell whatever the customer wants. (If you reduce the value of the spiff, or eliminate it altogether, this is more likely to happen.)

And maybe next time your management will think about this BEFORE they decide on a promotion approach.