Product Cannibalization

Companies are continually trying to innovate new products to expand their sales and market share.  This practice, however, comes at a price since selling a new product could mean losing sales of another product. 1.Explain how a company can balance the practice of cannibalization so they do not continually eliminate one product when a new product is introduced in the market. Use examples to demonstrate the positive and negative aspects of product cannibalization. 2.Since the stages of a product also influence the sales trends, explain how a company can use the product stage to their advantage if they understand the true position of the product in the market.

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