Cannibalization

Category: business

The negative phenomenon where a new model launched by a brand draws sales away from another model within the same portfolio.

Cannibalization happens when product portfolios overlap too closely. If a brand launches a new compact crossover that offers the same features and price point as its existing small hatchback, the crossover may "cannibalize" sales, effectively shrinking the brand’s total reach rather than expanding it.

Common Examples

• Management carefully tuned the price of the new crossover to ensure zero segment cannibalization with the existing best-selling SUV model.
• Careful segment cannibalization monitoring prevents the brand from wasting marketing dollars promoting two overlapping models to the same customer base.