Definition of Marketing Cannibalization (Product & Market)

Marketing cannibalization is an event that frequently occurs when a brand decides to launch a new product or service. New offers drown out old onesThis leads to a drop in sales and a concern for storage. 

Marketing cannibalization can occur for a number of reasons. What's more, cannibalization can affect both products and markets. Here's everything you need to know about marketing cannibalization. 

The different types of marketing cannibalization 

There are different varieties of cannibalization in marketing. The product cannibalization is a phenomenon characterized by increased sales of a new product. And this at the expense of older products. The cannibalization due to advertising occurs when a brand decides to choose a popular person to promote a new offer. The public is then distracted by the personality and pays no attention to the product being promoted. 

On the other hand, companies need to be careful when deciding to open new outlets. It is often the case that new outlets compete with existing ones, even though they market the same products. This phenomenon is known as store cannibalization which is different from cannibalization linked to distribution methods. The latter occurs when a company opts for a specific marketing channel. At the same time, it neglects the one it used previously. 

You also have the cannibalization of quantity. It means highlighting a product that benefits from special packaging. This in turn undermines the public's interest in basic training.

Product cannibalization: a deliberate marketing strategy? 

Marketing cannibalization occurs when a company brings a new product to market, leaving its older models behind. It occurs when a sign wants to replace an old product or service with a new one. As such, it takes on the aspect of a strategic marketing strategy aimed at selling a product that could be more profitable than the old one.

However, marketing cannibalization is often the consequence of launching a new product in a single market. This is a strategic error. In fact, this situation is the result of a company's desire to compete with another brand operating in the same field. However, instead of defying the competition, the new product or service overshadows the company's other products. 

Market cannibalization: a common form of marketing cannibalization 

Market or corporate cannibalization occurs when a brand focuses solely on its existing customers. It does not seek to attract new customers when promoting a new product. The problem is to increase production expenditure. At the same time, its market share does not expand. Generally speaking, companies suffering from market cannibalization inadvertently divert customers from one product to a new one. This has a negative impact on sales. 

There are also cases where deliberately cannibalize the market. This is the case when a company decides to open a new outlet close to one of its former stores. This, knowing that the two establishments will eventually cannibalize each other. However, the new store also ends up take market share from competitors. 

Note that using the cannibalization as a strategic marketing axis has met with disapproval from stock market analysts. These experts see in this situation a risk of loss of short-term profits.

As a result, companies need to take steps to avoid marketing cannibalism. This is done through in-depth market research before developing a new product. It's important to remember that products with comparable costs present a significant risk of cannibalization. To reduce this risk, companies need to find a way to develop products with unique branding. The price of new products must therefore rival those of competing brands, not those of old products.