Cannibalization
From Free net encyclopedia
- For the act or practice of eating members of one's own species, see Cannibalism.
In marketing
In marketing, cannibalization refers to a reduction in the sales volume, sales revenue, or market share of one product as a result of the introduction of a new product by the same producer.
For example, if Coca Cola were to introduce a similar product (say, Diet Coke or Cherry Coke), this new product could take some of the sales away from the original Coke. Cannibalization is an important consideration in product portfolio analysis.
See also: Product management, New Product Development, marketing, brand, product, product portfolio
In maintaining equipment
In maintenance of mechanical equipment, "cannibalization" refers to the practice of obtaining the spare parts necessary to repair one device by removing them from another similar device, rather than from a pool of spare parts. The device used as a source of spare parts is often crippled as a result, if only temporarily, in order to allow the recipient device to function properly again. Cannibalization can usually only occur with devices that use Interchangeable parts.
Such cannibalization can be a sign of extreme budgetary pressure that prevents the purchase of adequate spare parts, or some other emergency such as time constraints and physical distance from a source of spare parts. At other times, it is a reflection of a surplus of equipment relative to current needs or usage, making some devices unnecessary except as a source of parts for cannibalization. Sometimes cannibalization can occur if the equipment in question is obsolete, with the manufacturer(s) of the device or the spare parts no longer in existence.
An example of this is the many 30- and 40-year-old railway locomotives being run by small operators in the United Kingdom. These operators will often buy more locomotives than they actually require, and keep a number of them stored as a source of spare parts.