Customers and pricing
Cannibalization
A new product taking sales from the company's own products.
Facts checked against sources onWhat does Cannibalization mean?
Cannibalization happens when a new product or channel wins sales that would otherwise have gone to the company's existing products. In a launch case, count only the net new profit: if a new flavor sells 1 million packs but half of those buyers would have bought an existing flavor, only 500,000 packs are new.
Where does it come up in case interview prep?
- Using this in a case: growth and new product casesLesson in Customers and growth: the economics of marketing
- Revenue models, cost structure, unit economics and operationsLesson in Pharma, biotech and medical devices
- New product or service launchLesson
- Retail players, trends, and how to crack retail casesLesson in Retail
- Distribution, promotions, private label, and innovationLesson in Consumer packaged goods (FMCG)
- Internet platforms: players, super-apps, trends, regulation, and how to crack the casesLesson in Internet platforms, marketplaces, and digital advertising
- Automotive players, EV adoption by region, trends 2024 to 2026, and how to crack the casesLesson in Automotive and electric vehicles
- Drinks players, trends 2024 to 2026, and how to crack the casesLesson in Beverages: soft drinks, water, beer, wine and spirits
Related terms
- BundlingSelling several products together for one price.
- Unit economicsThe revenue and cost of one unit: one product, order or customer.
- TAM, SAM and SOMTotal market, the part you can serve, and the part you can win.
- Market shareOur sales as a share of total market sales.
- Relative market shareOur share divided by the largest competitor's share.
- Penetration rateThe share of potential customers who already use the product.
- Share of walletOur share of what one customer spends in the category.
- ARPU (average revenue per user)Revenue divided by the average number of users.
Learn it in context
See Cannibalization at work in a lesson from Customers and growth: the economics of marketing, with checks as you go.
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