Definition
Cannibalization is the reduction in sales (units or dollars) of a firm’s existing products due to competition from other products from the same firm in the same category. One common type of cannibalization results from the introduction of a new product by the same firm. [1]
Cannibalization is something a firm can only do to its own products. Taking sales from competitors is not cannibalization.
Marketers often assume the cannibalization rate will be their portion of the fair share draw.[2]
References
- Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; and David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance (Second Edition). Pearson Education, Inc.
- Common Language in Marketing Project, 2021.