Question

A firm can reduce cannibalization by: Select one: a. reducing the difference between high-margin and low-margin...

A firm can reduce cannibalization by:

Select one:

a. reducing the difference between high-margin and low-margin products

b. controlling the availability of low-margin products

c. using the same distribution channel for high-margin and low-margin products

d. none of the above

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Answer #1

ANSWER: D

CANNIBALIZATION MEANING:- cannibalization is a situation which arise when a company introduce a new product and as a result of it the similar kind of of previous product of the same company faces downfall in sales.

solution : We can avoid cannibalization by identidying the specific market of each of the product and by assessing the possible market demand for proposed new product.

the option a,b,c are not appropriate for the purpose of reducing cannibalisation because high margin and low margin products are those which gives high profit and low profit respectively, it is like dealing with cannibalization after it has incurred but cannibalization has be dealt with before its occurence which is only possible if we plan out the launch of new product with due causion.

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