Market cannibalization is the loss of sales caused by a company’s introduction of a new product that replaces one of its older products.
Market cannibalization can happen when a new product is similar to an existing product and both have the same customer base.
Market cannibalization is sometimes a deliberate strategy to stifle competition, and sometimes it is a failure to enter a new target market.
Market cannibalization is measured by the cannibalization rate, the number of lost sales of old products as a percentage of new sales.
Products with similar brands are most at risk of cannibalization. It is important to conduct thorough market research and testing to prevent cannibalization.