Question

Which of the following is an example of cannibalization?

A. A grocery store begins selling T-shirts featuring the local university's mascot.

B. A toothpaste manufacturer adds a new line of toothpaste (that contains baking soda) to its product line.

C. A convenience store begins selling pre-paid cell phones.

D. A basketball manufacturer adds basketball hoops to its product line.

Answer 1

The answer is

B. A toothpaste manufacturer adds a new line of toothpaste (that contains baking soda) to its product line.

Cannibalization is the reduction in sales of one product due to addition to a similar product to the product line

By adding a new toothpaste, the sales of existing toothpastes will go down as some customers will shift from existing toothpastes to the better version

In all other cases, new product is being added and not a similar one. Hence, no cannibalization.