Mizzou Marketing 4000 Exam 1 Practice Test

Cannibalization happens when a company’s new product competes with and reduces the sales of its existing products. The statement that best describes this is introducing a new product that takes sales away from an existing product. This shows internal competition where the new offering substitutes for what the company was selling before, rather than expanding the total market. For example, launching a higher-protein version of a cereal that mainly replaces sales of the original cereal shifts demand within the company’s own lineup rather than growing overall demand. By contrast, launching complementary products aims to broaden the portfolio, expanding into new geographic markets leverages existing products in new areas, and price reductions target attracting more customers rather than substituting existing offerings.