Explain Cannibalization

question 106

Essay

Explain cannibalization. How does a line extension strategy increase the risk of cannibalization?

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Definitions:

Behavior

The actions or reactions of a person or system in response to external or internal stimuli.

Marketing Channel

Critical actions or procedures required to shift goods' ownership from the production point to the consumption point.

Profitability

The financial success indicated by the surplus of income over expenses, demonstrating a company's ability to generate earnings.

Margins Earned

The difference between the cost of producing or purchasing goods and the revenue generated from selling them, typically expressed as a percentage of revenue.