Cannibalization occurs when
A)a brand has been mismanaged and must be revitalized in order remain a viable brand.
B)new products take sales away from the firm's existing products rather than generating additional revenues.
C)existing products have such a strong market share that new products fail to gain acceptance with consumers.
D)two or more companies collude to set prices, forcing smaller brands to leave the marketplace.
E)a firm develops a new product but does not allocate enough funds to promote the product successfully.

Question

Quizplus · Accepted Answer

Cannibalization refers to the situation where a company's new product eats into the sales of one of its existing products. This typically happens when both products appeal to similar customer segments, leading to a shift in sales rather than an expansion of total sales.

Cannibalization Occurs When