Question

Which of the following is an example of cannibalization? Group of answer choices A toothpaste manufacturer adds a new line of toothpaste (that contains baking soda) to its product line. A grocery store begins selling T-shirts featuring the local university's mascot. A basketball manufacturer adds basketball hoops to its product line. A convenience store begins selling pre-paid cell phones.

Answer 1

The corrects answer is: A toothpaste manufacturer adds a new line of toothpaste (that contains baking soda) to its product line.

Step-by-step explanation:

Cannibalization is a market strategy that can occur without the company's intention, and can be defined as when a company replaces a product on the market with a similar new product, as in the example above, when a toothpaste manufacturer adds a new one line of toothpaste (containing sodium bicarbonate) to its product line.

This strategy can be detrimental to the company, since there may be less sales of an existing product for a similar product, which consequently generated higher production costs for the organization, therefore it would not be characterized as gains for the company, but as losses , as this strategy would not increase the company's market share, but a detriment of one product by another.

Therefore, it is necessary that there is constant monitoring of each product in the company so that cannibalization does not occur and each product contributes to the company's profitability individually.