In marketing, cannibalisation refers to a situation where a new product or service introduced by a company takes sales away from its existing offerings, rather than attracting new customers or expanding market share. This often occurs when similar products compete within the same brand portfolio, leading to reduced revenue or profitability from the original product.
For example, if a company launches a new, lower-priced version of a successful product, loyal customers might switch to the new version, impacting overall margins.
While some cannibalisation can be strategic, used to stay competitive or refresh a product line, excessive internal competition can undermine growth.