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Product cannibalism
Product cannibalism
Product cannibalism
Product cannibalism
Product cannibalism
Product cannibalism
Product cannibalism
Product cannibalism
Product cannibalism
Product cannibalism
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Product cannibalism

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  • 1.  
  • 2. Product Line Extensions
    • Are utilized because they:
    • Minimal Market Resistance
    • Leverage Existing Technologies
    • Utilize Manufacturing
      • Capability
      • Capacity
    • Minimize Financial Investment
  • 3. Product Line Extensions
    • Dominant Firms Utilize to:
      • Maintain market share
      • Maintain shelf space
    • Low Market Share Firms and New Entrants complain they use the strategy:
      • Corner Market Shelf Space
      • Keep Out Rivals
      • Protect Competitive Position
  • 4. Product Line Extensions
    • Are created by the introduction of
      • New Sizes
      • New Forms
      • New Compositions
      • New Flavors
      • New Packages
      • New Varieties
  • 5. Product Line Extensions
    • Though they minimize failure risk
    • They can create negative impact on exiting products, called
    • Product Cannibalism
  • 6. Product Cannibalism
    • Can be defined as:
    • The process by which a firm’s new entry product gains a portion of its sales by diverting sales from a firm’s exiting product(s).
    • Therefore, the loss of potential profits from an existing product is a real cost and must be absorbed by the new product.
  • 7. Product Cannibalism
    • May result from:
    • Management Decisions, or
    • Competitive conditions
    • And becomes a problem when:
    • No incremental competitive benefit, or
    • No financial benefit result to the firm.
  • 8. Product Cannibalism
    • Examples of Management Decisions that can result in excessive cannibalism:
    • Pressure for sales growth from new offerings
    • Increasing product line to dominate a category
    • Poor positioning of new products
    • Unrealistic market segmentation
    • Sales force overemphasis on new products
  • 9. Product Cannibalism
    • Some positive motivations for creating cannibalism:
    • Increasing product line to increase brand equity for the base brand
    • To eliminate gaps in existing product line that might be filled by competition, “ pre-emptive cannibalism”
  • 10. Product Cannibalism
    • Some examples of “pre-emptive cannibalism” :
    • Flanker strategy (stop brand switching)
    • Fighting strategy
      • High market share
      • Susceptible brands to price competition
      • Wish to preserve profit margins

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