Which of the following is an example of cannibalization?

A. A toothpaste manufacturer adds a new line of toothpaste (that contains baking soda) to its product line.

B. A basketball manufacturer adds basketball hoops to its product line.

C. A convenience store begins selling preminuspaid cell phones.

D. A grocery store begins selling Tminusshirts featuring the local university's mascot.

Question

Business

Emery Downs

30 April, 05:29

Which of the following is an example of cannibalization?

A. A toothpaste manufacturer adds a new line of toothpaste (that contains baking soda) to its product line.

B. A basketball manufacturer adds basketball hoops to its product line.

C. A convenience store begins selling preminuspaid cell phones.

D. A grocery store begins selling Tminusshirts featuring the local university's mascot.

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Answers (1)

Know the Answer?

Harold Gomez · Answer 1

A. A toothpaste manufacturer adds a new line of toothpaste (that contains baking soda) to its product line.

Explanation:

Market cannibalization is explained to be a loss in sales caused by a company's introduction of a new product that displaces one of its own older products.

Introduction of a new toothpaste containing baking soda is a perfect example, because it will reduce or alter sales in the other brand units.

The cannibalization of existing products leads to no increase in the company's market share despite sales growth for the new product. Market cannibalization can occur when a new product is similar to an existing product, and both share the same customer base. Cannibalization can also occur when a chain store or fast food outlet lose customers due to another store of the same brand opening nearby.