In e-commerce, some companies intentionally cannibalize their retail sales through lower prices on their online product offerings.
More consumers than usual may buy the discounted products, especially if they'd previously been anchored to the retail prices.
In project evaluation, the estimated profit generated from the new product must be reduced by the earnings on the lost sales.
Cannibalization is an important issue in marketing strategy when an organization aims to carry out brand extension.
However, if the strategic intent of such an extension is to capture a larger market of a different market segment notwithstanding the potential loss of sales in an existing segment, the move to launch the new product can be termed as "cannibalization strategy".
In India, where the passenger-car segment is going up dramatically since the turn of this century, Maruti Suzuki's launch of Suzuki Alto in the same sub-category as Maruti 800, which was the leader of the small-car segment to counter the competition from Hyundai is seen to be a classic case of cannibalization strategy.
In the context of a carefully planned strategy, cannibalization can be effective, by ultimately growing the market, or better meeting consumer demands.
For example, when Apple introduced the iPad, it took sales away from the original Macintosh, but ultimately led to an expanded market for consumer computing hardware.
Slowness of the market to react to new products that have been introduced, meaning that there has to be time scope allowing for seasonal changes and the consumers to act accordingly.
Correlated error structures may permeate the brand as not just one product will be effected so it is important to understand the scope of the commodity and see total impact.
As sales plateau and decline only to stabilize at a lower amount, it is important for business to innovate and experiment in order to create something new and cutting edge to maintain market share.
[10] While the iPhone shipped massive amounts of product, the iPad never recovered to its previous sales plateau.