Marketing concept: Cannibalizing

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This is the very old concept of marketing but marketers are realizing now. First of all I must tell you about this concept in simple way"Cannibalizing means when newly launched product start eating the market share of existing product. In other word when companies are going to extend there line of products it happened. It mostly happens in Automobile sector but not with all companies. Maruti Suzuki is the great victim of this concept. Further I will write about each and every aspects of this concept with examples mostly in Indian context.
Reason for cannibalize- The very first reason is company does not have clear positioning of product. Second one is lack of effective target market because when you are launching the new product in market you are targeting the same customer who is your own for existing product. And of course third one is bad marketing of product. Somewhere timing of launching product is also responsible for that. According to me most obvious reason is why they are quoting same price for different product and this is the most important part of cannibalizing.
How it happened- A very good story of Maruti Suzuki is like this when they launched Zen they were doing great in market due to lack of competition. Over a period of time when during 1990 Wagon R and Alto came into the market they starts eating market share of Zen the result was declining the share of Zen. Recently Zylo SUV segment launched by M&M is also going to eat somewhere market share of Scorpio but M&M is very smart marketer they will be control it to some extent. As far as various marketer views are concern if they would take care of it then it cannot happened in future. In case of cannibalizing Maruti Suzuki is master in that following are the few examples of cannibalized product.
1. Zen by Wagon R and Alto
2. Bajaj XCD 125 by Pulsar
3. Maruti 800 by Nano
4. Alto, Omni by Eeco
5. Swift by Ritz
6. Spelendar by CD dawn
and many more................
Having said that, there few positive aspects of cannibalizing the very first one is they are filling product line to always be first in market than competitor. Second one is getting benefits of scale of economies, third one is making customer happy with new product with innovation and retaining them.
As far as my understanding is concern for getting over this problem is first of all they should have different prices for different products. Second one is they should have clear target customer and of course better marketing.

Comments

  1. Aniket VichareFebruary 27, 2018 at 12:30 AM

    Hey! This is an extremely important information for marketers and I think everyone should know that cannibalizing is a prevalent practise today and it does eat up the market share of an existing product. Thanks for the share would be looking forward to more concepts from you.

    ReplyDelete

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