Client: Vela Cosmetics, which sells skincare in glass jars.
Question: should Vela launch refill pouches for its best-selling cream, and at what price?
What you have: customer numbers, expected adoption, refill and jar prices and margins, and how many refill buyers would otherwise have bought a new jar.
Done looks like: demand for refills, the profit they really add after cannibalization, a price that makes it work, and a launch plan. All figures are fictional.
A new product launch case asks whether a product will add enough profit to be worth it. The steps:
- Demand: customers × adoption × purchases a year × price.
- Unit economics: margin per unit.
- Cannibalization: if some buyers would otherwise have bought your existing product, their old margin is lost. Net contribution = new margin - share switching × old margin.
- Launch plan: where to launch first, how to test, what to watch.
The trap in this case is a product that looks profitable on its own but adds almost nothing once you subtract the jars it replaces.