Dictionary of Marketing Terms: cannibalization
cannibalization
a negative consequence resulting from the line extension of a product. Although generally line extensions do not compete with each other, there are occasions when the new product will take the market share away from the older brand, as in the addition of a diet soda product to a previously existing brand line of soda. The diet soda product will compete with and eventually eat away at the profits of the previously existing product, hence the name cannibalization.
Cannibalization may also be said to occur when product sales fall at a particular sales outlet or set of outlets as the result of the opening of a new outlet, because sales at the new outlet are eating away at sales at the older ones.
