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cannibalization

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cannibalization

In business, situation where an increase in sales for one branded product results in a decrease in sales for another branded product made by the same company. The cause of cannibalization is usually insufficient product differentiation between the two products. When a training shoe manufacturer introduces to the market a product similar to an existing shoe, with only slight product modification, the new shoe is likely to cannibalize existing sales, as well as to build new sales.



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There is jeopardy of cannibalization," said Robert Benson, president of Beverly Hills-based restaurant company Open Menu Inc.
The objective of this simple model is to provide the managers with insights on the binding constraints for each variant and the threshold level of cannibalization that can be allowed.
``You have to worry about cannibalization, though,'' Martin said.
 
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