Research Topics:

Market Forecasting | Product Development Research | Product Positioning Studies

Content Type:

Glossary

Cannibalization Definition

A reduction in the sales volume, sales revenue or market share of one product as a result of the introduction of a new product by the same producer.

Cannibalization occurs when the sales of a new product or service come at the expense of the sales of an existing product within the same company. To offset sales reductions, businesses look to cannibalization analysis, which can contribute to informed decision-making about product launches, pricing strategies and resource allocation. It delves into how different products within an entity’s portfolio interact and compete with one other. Failing to consider cannibalization can lead to unexpected consequences like eroding market share or stunting revenue growth.

Who relies on analysis of cannibalization?

Marketing managers, product development teams and strategists use cannibalization analysis to understand how the introduction of a new offering might impact existing product lines.

Why should I care about cannibalization?

Cannibalization insights are crucial in anticipating and mitigating potential impacts of introducing a new product. Businesses can adjust marketing and pricing strategies to minimize revenue loss and maximize overall profitability if they study how cannibalization might impact them.