Cannibalization
What is cannibalization
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Definition of cannibalization
Cannibalization is when a company has several products that compete with one another within the same market.
This is naturally seen as disadvantageous, as a company will not only eat away at its market share for its own products but also on the total resources it has available for each of those product teams.
An advantage, however, can be to give the appearance of variety and choice in markets that are otherwise dominated by just a couple of companies. Some businesses also see it as an advantage to compete internally for the same customers, rather than with external competitors.
General FAQ
What is cannibalization in marketing?
Cannibalization in marketing refers to a reduction in traffic, engagement or sales due to the introduction of multiple features, CTAs or products at the same time.
What is cannibalization in product management?
In product management, cannibalization refers to when two different products or features of the same company compete with one other. For example, if a phone manufacturer releases multiple phone models in the same price group and with similar performance cannibalization may occur.
How to calculate cannibalization rate?
You can calculate the cannibalization rate by dividing the lost sales of the existing product due to the sales achieved for the new product.
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