Hello Clarice…. Wait wrong type of cannibalism. Well, now that we have your attention let’s talk about the cannibalization effect in marketing. What is it? How does it work? Cannibalization is a loss in sales that is caused by an intro of a new product that in turn, displaces older ones. This can be done by one’s own company or a competitor. There are a few types of cannibalization: planned, through discounts, and through e-commerce.
1. Planned: a company offers a new product to replace an old one. Think of when Apple rolls out a new model. This sometimes converts new customers from other brands
2. Discounts: happens when a brand offers discounts frequently and buyers begin to expect it. They move toward buying only products that are discounted and thus, the full price items cannibalize
3. E-commerce: happens when a brand puts more emphasis on online sales than brick and mortar.
Most times, cannibalization of a brand’s own products is unintentional but sometimes it isn’t. It can be used as a strategic marketing play. A few benefits are reviving old product lines and bargain alternatives can prevent your competitors from undercutting your brand. That being said, there are some risks to self-cannibalization. It could dilute your value and create market saturation. Cannibalization is unavoidable eventually but can also be used as a marketing tactic to push certain products/services. Bon appetite.
