Question

A company known for its high-quality watches and clocks introduces a line of well-designed pocket watches to increase its market share. The pocket watch style catches on in the fashion world, and in a short time the company’s pocket watch sales climb quickly. At the same time, the sales of its wrist watch line decline. The pocket watch line is having what marketing effect on the company’s wrist watches?

Answer 1

Answer: Market Cannibalization

Explanation: The pocket watch line is having the market cannibalization which is also known as the corporate cannibalism effect on the company's wrist watches.

Market Cannibalization refers to a reduction in sales of a particular old product which is usually as a result of a company's introduction of a new product.

The introduction of the new product displaces the older products mostly because both products have thesame customer base and also perform similar functions.

It is essential to note that despite the increase in sales of the new product, the company's market share experiences no increase but a decrease which is due to the sales loss of the older product.