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Product cannibalization and the role of prices

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  • Lindsay Meredith
  • Dennis Maki

Abstract

The role of brand prices in contributing to product cannibalization is examined. Price elasticities and reference price theory are used to provide a theoretical foundation and empirical test for the impact of a firm's cheap brand on one of its expensive brands. Results are consistent with the conclusion that the market share of the company's premium brand was cannibalized by a growth in sales of its cheap brand.

Suggested Citation

  • Lindsay Meredith & Dennis Maki, 2001. "Product cannibalization and the role of prices," Applied Economics, Taylor & Francis Journals, vol. 33(14), pages 1785-1793.
    • Handle: RePEc:taf:applec:v:33:y:2001:i:14:p:1785-1793
    DOI: 10.1080/00036840010015769
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    References listed on IDEAS

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    Cited by:

    1. H. R., Ganesha & Aithal, Sreeramana & P., Kirubadevi, 2020. "Experimental Investigation of Cannibalisation by Introducing a Global Brand Abreast Existing Indian Store Brand," MPRA Paper 104028, University Library of Munich, Germany.
    2. Ramani, Vinay & De Giovanni, Pietro, 2017. "A two-period model of product cannibalization in an atypical Closed-loop Supply Chain with endogenous returns: The case of DellReconnect," European Journal of Operational Research, Elsevier, vol. 262(3), pages 1009-1027.
    3. Zhang, Yi & Hua, Guowei & Cheng, T.C.E. & Zhang, Juliang & Fernandez, Vicenc, 2020. "Risk pooling through physical probabilistic selling," International Journal of Production Economics, Elsevier, vol. 219(C), pages 295-311.
    4. Eymann, Torsten (Ed.), 2007. "Tagungsband zum Doctoral Consortium der WI 2007 [WI2007 Doctoral Consortium Proceedings]," Bayreuth Reports on Information Systems Management 24, University of Bayreuth, Chair of Information Systems Management.

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