Asked by Mustafa Ya?ar on Sep 24, 2024

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​In a multi-product firm,cannibalization is

A) ​An increase in the quality of both the brand's products
B) A decrease in the quality of both the brands products
C) An increase in both the brand's sales
D) ​An increase in one of the brand's sales due to the decrease in sales of the other.

Cannibalization

The reduction in sales volume, revenue, or market share of one product as a result of the introduction of a new product by the same producer.

Multi-product Firm

A company that offers a variety of different products rather than focusing on a single line.

  • Gain insight into the impact of pricing adjustments on demand and sales for various products.
  • Perceive the crucial strategies in positioning products to lessen cannibalization among a corporation's own merchandise.
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SM
Stephanie Marin6 days ago
Final Answer :
D
Explanation :
Cannibalization refers to the situation where a new product or service offered by a firm competes with its existing products or services, and as a result, eats into their sales. Option D is the correct choice, as it describes the increase in the sales of one brand at the expense of the other. It is a common strategy among firms to introduce new products to capture new segments or markets, but it could hurt sales of existing products, leading to cannibalization. Therefore, firms should carefully evaluate the potential for cannibalization before introducing new products or services.