In a multi-product firm,cannibalization is
A)An increase in the quality of both the brand's products
B)A decrease in the quality of both the brands products
C)An increase in both the brand's sales
D)An increase in one of the brand's sales due to the decrease in sales of the other.

Question

​In a multi-product firm,cannibalization is
A)​An increase in the quality of both the brand's products
B)A decrease in the quality of both the brands products
C)An increase in both the brand's sales
D)​An increase in one of the brand's sales due to the decrease in sales of the other.

Quizplus · Accepted Answer

Cannibalization refers to the situation where a new product or service offered by a firm competes with its existing products or services, and as a result, eats into their sales. Option D is the correct choice, as it describes the increase in the sales of one brand at the expense of the other. It is a common strategy among firms to introduce new products to capture new segments or markets, but it could hurt sales of existing products, leading to cannibalization. Therefore, firms should carefully evaluate the potential for cannibalization before introducing new products or services.

​In a Multi-Product Firm,cannibalization Is

In a Multi-Product Firm,cannibalization Is