Question

What is being illustrated in the given scenario where Tim Totes, Inc. introduced a new cell phone model into its existing market, leading people to stop using the older model, which had been the major source of profits?

a. Product differentiation
b. Upselling
c. Cannibalization
d. Mass customization

Answer 1

The scenario where a new product from Tim Totes, Inc. causes people to stop using an older model represents cannibalization, a business occurrence where a new product adversely affects the sales of a company's existing products. The correct option is c.

Step-by-step explanation:

The scenario described, where Tim Totes, Inc. introduces a new cell phone model to the market leading consumers to abandon the older, previously profitable model is an example of cannibalization.

Cannibalization refers to a situation where a company's new product eats into the sales of one of its older products.

This can lead to a reduction in overall sales or market share for the older product, and it's a situation that companies try to avoid or manage carefully. The correct option is c.