ProductCannibalization

Mausikar Rudro

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Market cannibalization is the impact of a company's new product on the sales

performance of its existing and related products.

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When the sales of an existing product of a company is

reduced due to introduction of another product, it is

cannibalization

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The new product “eats” the existing product, thus

the name “Cannibalization”

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Product Cannibalization can be used to boost the overall sales of a company

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Say,

Product A Generates = $100

After introducing Product B,

Sales of Product A reduce to $50Sales of Product B generates $80

Total Sales = $50 + $80= $130

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Boost up the salesIntroduce new products

Product InnovationCustomer ExpectationsGenerates More Profit

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Ad Cost of new productUnsatisfied CustomerProduction Cost Rises

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Coca Cola Introduced the New Coke On Apri l 23, 1985,

replacing the old Coke formula in order to give

customers new taste

Coca Cola (1985)

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P&G continuously cannibal ized its featured

razor series, GILLETTE, by introducing Fusion, Mach,

Vector, Blue series

P&G

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Unilever introduced Axe Body Rol l on although it had

Rexona Rol l on.

Unilever

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