Product cannibalization and the role of prices

Lindsay Meredith and Dennis Maki

Applied Economics, 2001, vol. 33, issue 14, 1785-1793

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.

Date: 2001
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DOI: 10.1080/00036840010015769

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