While this may count inherently negative, in the context of a carefully think strategy, it can be effective, by ultimately growing the market, or better meeting consumer demands. Cannibalization is a key consideration in product portfolio analysis.
For poser, when Coca Cola introduced Diet Coke, a correspondent product, this took sales away from the original Coke, but ultimately direct to an expanded market for diet soft drinks.
Another example of cannibalization occurs when a retailer discounts a particular product. The tendency of consumers is to vitiate the discounted product rather than competing products with higher prices. When the promotion event is over and prices return to normal, however, the effect will tend to disappear. This temporary diversify in consumer behavior can be described as cannibalization, though scholars do not normally use the excogitate cannibalization to denote such a phenomenon.
In e-commerce, some companies advisedly cannibalize their retail sales through lower prices on their online product offerings.
More consumers than usual may buy the discounted products, in particular if theyd previously been anchored to the retail prices. Even though their in-store sales baron decline, the company may see overall gains.
In declare oneself evaluation, the estimated profit generated from the new product must be trim back by the earnings on the lost sales.
Another vernacular case of cannibalization is when companies, particularly retail companies, open sites too fast to each other, in effect, competing for the same customers. The potential for cannibalization is often discussed[citation needed] when considering companies with more outlets in an area, such as Starbucks or McDonalds.
Cannibalization is an important uncover in marketing strategy when an...If you want to get a full essay, order it on our website: Orderessay
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