Cannibalization
Cannibalization Assignment Your choice of line extension (Allround +) which of the line extensions do you believe will have the least degree of cannibalization and why? We chose the 12-hour multi-symptom capsule because it will have the least amount of cannibalization because our product right now only works for 4 hours. We will reach a new market of customers and it won’t hurt our market with our Allround product. The capsules are also different because they are easier to carry around so that will reach different customers.
The degree to which you believe the sales of your choice of line extension will come from your current core product (Allround). We believe that our new product, Allround +, won’t take much of the sales revenue from our current product Allround. The products tend to customers in different markets and customers looking for different things in their OTC medicines. We do, however, believe that Allround will help Allround + get sales because of how well known the Allround brand is and how respectable our company is.
What options do you have to minimize the degree of cannibalization of the line extension? We could try to position them on the shelf in different areas so that customers don’t have to choose between the two products. We could position the new Allround + next to the Extra brand because then it would be in competition with that brand instead of competition with our Allround. This would also be good because in our marketing plan we discussed that our biggest competitor is Ethik so that would go in line with competing with them.
We could also market to different kinds of customers. With the Allround + product, we could market to more active people that are out all day that need the 12 hours of help and with Allround we could just market to parents of children who are at home all day where it doesn’t matter if you took several doses a day. Another option would be to make the Allround + product a little more expensive because it lasts so much longer and is more efficient. This would cause there to be two different types of customers who are buying the different products.
