What is the concept of cannibalization?

What is the concept of cannibalization?

In marketing strategy, cannibalization refers to a reduction in sales volume, sales revenue, or market share of one product as a result of the introduction of a new product by the same producer.

What is an example of cannibalization?

A supermarket chain, for example, might open a new store near one of its older stores, knowing that they will inevitably cannibalize each other's sales. However, the new store will also steal market share from nearby competitors, even driving them out of business eventually.

What is cannibalism in business?

Corporate cannibalism is when a product sees a decrease in sales volume or market share due to the release of some new product that has been introduced by the same company. The new product ends up “eating” demand for the current product, therefore reducing overall sales.

How can we prevent cannibalization?

How to Avoid Product Cannibalization

1. Step 1: Conduct Thorough Research. To find new audiences for your product, you need to analyse and research the market for demand. ...
2. Step 2: Ensure Your Products Are Distinctive. ...
3. Step 3: Carefully Position Your Product. ...
4. Step 4: Test Before Launching. ...
5. Step 5: Measure Everything.

What's another word for cannibalize?

In this page you can discover 5 synonyms, antonyms, idiomatic expressions, and related words for cannibalize, like: salvage, strip for repair, disassemble, dismantle and cannibalise.

How is cannibalization effect measured?

Cannibalization Rate is calculated by dividing the new product sales that replace existing sales by total new product sales.

Is cannibalization good or bad?

Market cannibalization can have a negative effect on a company's bottom line, forcing an existing product's life to end prematurely because sales shifted to the new product, rather than tapping into a new market as intended. ... Cannibalization is a key consideration in product portfolio analysis.

Can animals be cannibals?

Although cannibalism isn't exactly sustainable for most species, some species occasionally engage in cannibalistic behavior. This cannibalistic behavior in animals can be attributed to environmental causes, overcrowding, or even basic survival instincts.

How do you test for cannibalization?

Calculate the cannibalization rate by dividing the sales loss of the existing product by the sales achieved for the new product.

What does it mean to dismantle something?

: to take (something, such as a machine or structure) apart so that it is in separate pieces. : to destroy (something) in an orderly way : to gradually cause (something) to come to an end. See the full definition for dismantle in the English Language Learners Dictionary. dismantle. verb.

What does cannibalizing mean?

• Definition of cannibalize. transitive verb. 1a : to take salvageable parts from (something, such as a disabled machine) for use in building or repairing another machine.

What does cannibalize mean?

• cannibalize a reduction in sales volume for a company's product resulting from the introduction of a new, similar product. to use parts from one object to repair another of the same type.

What does cannibalization mean?

• Definition: Cannibalization refers to the loss of a product’s sales due to the release of a newly created product. In other words, a newly introduced product line might take away market share from an existing product line instead of gaining overall market share for the company.