Defining the Concept of Cannibalization in Marketing (Essay Sample)

Cannibalization in Marketing
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Cannibalization in Marketing
According to Chandrasekar (2010), cannibalization is a concept used in market strategies to describe the reduction in sales revenue, sales volume, or market share of a single product as a direct consequence of the producer introducing a new product in the market. Cannibalization is one of the primary considerations when conducting a product portfolio analysis (Anandan, 2009). This marketing concept can be very effective if used appropriately to develop robust marketing strategies that can help improve customer satisfaction and expand the company's market.
One example that can illustrate the concept of cannibalization is the introduction of the iPad by Apple, Inc. The introduction of the iPhone ultimately reduced sales volumes and revenues from the Macintosh, which was one of the company's best performing products. However, this strategy eventually proved fruitful for the company as it resulted in an expanded market for consumer computer hardware (Chandrasekar, 2010). From this approach, cannibalization is used as a strategy that will significantly hurt the organization's competitors by reducing their market share.