A firm that acquires a substitute product can try and reduce inter-product cannibalization by
A)Doing nothing
B)Repositioning its product or the substitute so that they do not directly compete with each other
C)Pricing each product at the same level
D)Raising prices on the low-margin products

Question

Quizplus · Accepted Answer

Repositioning its product or the substitute so that they do not directly compete with each other is the best choice to reduce inter-product cannibalization. This strategy can involve targeting different customer segments, emphasizing different product features or benefits, or focusing on different distribution channels. This approach can help preserve market share for both products and prevent them from directly competing with each other. Doing nothing (A) can lead to increased cannibalization, while pricing each product at the same level (C) may not address the underlying issue of competition between the two products. Raising prices on low-margin products (D) can also be risky, as it may lead to decreased demand and loss of market share.

A Firm That Acquires a Substitute Product Can Try and Reduce