...Perceived Cannibalization Related to Retail Cross Channelization Brandon Toliver, Student, EMSE 6573 Spring 2016 Abstract: The expansion of many businesses in the online environment has been delayed as a result of an assumed negative impact on traditional sales. This presumed cross channel cannibalization should be based on a more empirical analysis that promotes informed decisions. An examination of related existing literature and research will be utilized to present a solution to the following problem: anticipated assumptions, concerns and fears are impacting organizations utilization of the Internet for fear of cross channel cannibalization. The proposed solution presented combines several established quantifiable equations and methods, producing a standardized method of analysis regarding the impact of online sales. This brief paper contends that online sales pose no immediate cannibalization of tradition sales, making these concerns relatively baseless. Problem Overview The phenomenon of concurrent channels being provided by the same company is fairly new, but the emergence of the Internet as an enduring market necessitates the adaption of online retail in order to remain competitive [1][3]. Late entrants into this market are apprehensive about the Internet’s bipolar nature, since it has already demonstrated its ability to catalyze both opportunities and threats [5]. The dot.com bust of the 1990s increased many retailers’ hesitance in expanding their operations...
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...retail sales, toothbrushes currently account for 15.5% of that market. In recent years, many new products have been introduced into the market, making competition fierce. Increased media coverage and awareness of issues, such as gum disease, have lead to the development of a new class of toothbrushes; the super-premium category. Precision marks Colgate’s first foray into this class of toothbrushes. In our opinion by launching Precision as a niche product in the super-premium category, marketers will be able to target the fastest growing segment within the market, production managers will be able to maintain the production schedules and product managers of other lines within the CP family would be less concerned about the potential cannibalization of their products which is a major concern if Precision is positioned as a mainstream brand. Consumer in the oral hygiene market space consider both toothpaste and toothbrush as an important part of their oral care however proper brushing is considered as the most important aspect of their dental care regimen. The toothbrush market is currently segmented in two primary ways. First, segmentation exists with regard to...
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...the market and meet the above breakeven unit calculation. The loss of sales of premium beer to the new light beer market is estimated between 5 and 20%. The analysis shown in Exhibit 6B shows possible cannibalization in a best (5%) and worst (20%) case scenario. In both scenarios, the Mountain Man Light product proves to be a favorable addition to MMBC’s declining income statement. With MMBC selling 70% of its product to off premise locations, there is a certain risk that these suppliers would buy the same volume from MMBC, just distributed differently, leading to self-cannibalization. It is also possible that cannibalization could be minimal because often this type of product line expansion helps secure additional shelf-space. The cannibalization rate is dependent on the execution of the light beer positioning and campaign execution. If a 5% cannibalization rate was realized, MMBC might not have to obtain the 60% brand awareness with the initial advertising campaign necessary to realize a net profit in two years. Although there are many factors to consider if marketing expenditures were decreased, such as effects on initial market share and subsequent growth of market share, MMBC could decrease advertising expenditures for the launch of Light. As the realized cannibalization rate increases, MMBC would have to achieve a higher brand awareness in order to gain a higher market share to negate the...
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...qwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwer...
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...Executive Summary The Republic National Bank of Dallas is the leading lending institutes in the Dallas area and in all of Texas. In 1977 the current marketing director for RNBD was asked to assess the effect of offering a new type of account, an interesting paying account that allows for negotiable orders of withdrawal called a NOW account. The NOW account originated in the New England states in 1972 and have grown to be a sizable amount of all accounts held in the that area. With 50 months of data available to see how the NOW accounts have influence banking and the traditional checking accounts in the area, it was time for RNDB, a leader and innovator in retail bank accounts in the Dallas area, to consider the potential of offering and what effect it would have on the business. Analysis shows that a 100% cannibalization of RNBD’s current retail checking accounts would cause a loss of close to $6 million dollars annually. At a 44% cannibalization, which was seen in Massachusetts, a market most similar to the Dallas area, would result in a loss of $2.6 million. The recommendation for RNBD includes determining a breakeven point for an account balance at approximately $1,800 and focus on conversion of current customers at that level or above to avoid losing any of their current customer base. Situation Analysis & Decision Problem The situation at hand is whether Republic National Bank of Dallas should jump into the NOW account fray and offer NOW accounts along...
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...Proctor and Gamble, Inc. Scope Case Synopsis Gwen Hearst, Scope Mouthwash Brand Manager for Procter & Gamble, Inc is preparing a three year strategic plan for Scope in the Canadian market. Her responsibilities focus on three central areas: maximize the market share, volume and profitability of the brand. She needs to develop a strategy to compete with a new market entry, Plax. Plax has targeted fighting plaque as a new benefit for mouthwash. In two years, Plax has gained 10% of the market and during a time when the market growth rate has been declining. The Scope brand has maintained a constant market share level with slight decline and still retains largest percentage of the market. The strategic options include maintaining the status quo, introducing a new product already developed as either a line extension or flanker product, or develop new marketing plan for existing product. She has formed a team across company functions to address these issues and formulate a strategic plan. Decisions to be Made 1) Should Scope maintain the status quo or seek new opportunities? 2) Should Scope reposition its current product or develop a new product? 3) Should Scope launch a flanker brand or introduce a line extension? These decisions must be made in this order. Scope must first decide if it actually needs or wants to move forward with seeking new opportunities. If Scope wants to maintain the status quo, then no effort needs...
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...Arguments for launching Clean Edge as a niche product A primary of launching the Clean Edge as a niche product is that the company would incur a lot less cannibalization of its Pro and Avail product lines, which allowed Paramount to capture the unit-volume market-leader position in 2009. Though a cannibalization rate of 35% is expected with the launch of Clean Edge as a niche product, the rate is significantly lower than the 60% expected if Clean Edge was positioned as a mainstream brand. As Rosenberg indicated, a niche positioning strategy would be a better fit to the company’s existing product portfolio. Furthermore, the niche positioning strategy would incur considerably lower marketing expenses than the mainstream positioning strategy. Marketing expenses for the niche positioning strategy is $15 million for the first year and $16 million in the second year. The niche option is much lower compared to the expected marketing expenses for the mainstream option, which would cost $42 million in the first year and $39 million in the second year. A strong quantitative argument could be made for launching Clean Edge as a niche product because it would cost $50 million less in marketing expenses over the course of two years. Moreover, greater advertising expenditures for the mainstream launch may not be justifiable given the fact that the cost of advertising is increasing greater than the rate of retail sales dollars in the super-premium segment. The scenario analysis conducted...
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...it has to take one of two paths: &Mac183; New capacity will have to be bought or built when capacity runs out, in which case the opportunity cost will be the higher cost in present value terms of doing this earlier rather than later. &Mac183; Production will have to be cut back on one of the product lines, leading to a loss in cash flows that would have been generated by the lost sales. Again, this choice is not random, since the logical action to take is the one that leads to the lower cost, in present value terms, for the firm. Thus, if it cheaper to lose sales rather than build new capacity, the opportunity cost for the project being considered should be based on the lost sales. How should we treat product cannibalization in capital budgeting? Product cannibalization refers to the phenomenon whereby a new product introduced by a firm competes with and...
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...Unilever in Brazil (1997-2007): Marketing Strategies for Low-Income Consumers Course Name: Marketing Management Assignment Title: Unilever Brazil Write-up Submitted by: G14 Name of Group member PGID Sudheendra Raj Bajpai 61610263 Soumya Thakur 61610042 Ashish Poddar 61610746 Omni Nishar 61610806 Table of Contents TABLE OF CONTENTS........................................................................................................................................ 2 1. EXECUTIVE SUMMARY............................................................................................................................. 3 2. SITUATION ANALYSIS .............................................................................................................................. 4 3. MARKET SEGMENTATION ........................................................................................................................ 5 4. STRATEGY OPTIONS ANALYSIS ................................................................................................................ 6 5. MARKETING MIX ..................................................................................................................................... 9 5.1 5.2 5.3 5.4 PRODUCT ................................................................................................................................................. 9 PRICE...........................
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...Introduction The following report shows that the proposal of the modernisation project should obtain funding from the corporate headquarters of Victoria Chemicals. The project has an initial outlay of GBP12 million to renovate and rationalise the polypropylene production line at Merseyside plant. This is done in order to make up for deferred maintenance and exploit opportunities to achieve increased efficiency. This report will look at the following four main areas of concern in order to calculate the feasibility of this Merseyside Project: * The cost of GBP2 million for the purchase of new rolling stock being allocated to the Transport Division or to the Merseyside project. * The cannibalization affect on Rotterdam sales looking at both Sales and Marketing Department views. * The modernisation of the ethylene-propylene-copolymer rubber (EPC) production line at a cost of GBP1 million. * The correct use of inflation with regards to nominal figures The report will discuss the concerns above giving a final decision on them. From these four different “hurdles” will be used to evaluate if the capital expenditure proposal for Merseyside Works should go ahead. These being: * Impact on earnings per share * Payback Period * NPV of the project (Discounted Cash Flow method) * Internal Rate of Return Background Victoria Chemicals is a major competitor in the world wide chemical industry and a leader in producing polypropylene. Victoria...
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...Summary: In early 1992, Goodyear Tire and Rubber Company executives were reconsidering a proposal from Sears, Roebuck & Company that was originally made in 1989. The proposal from Sears was for Goodyear to sell its popular Eagle brand tires through 850 Sears Auto Centers in the U.S. This proposal was declined in 1989 because Goodyear management felt that selling their tires through a mass merchandiser such as Sears would undermine the tire sales of company owned Goodyear Auto Service Centers and franchised Goodyear Tire Dealers. However, following a $38 million loss in 1990 and a change in Goodyear top management in 1991, the Sears proposal resurfaced. Two factors apparently prompted Goodyear’s renewed interest in the Sears proposal. First, the Goodyear brand passenger car replacement tire market share in the US had a 3.2 percent decline between the years 1987 and 1991. This share decline represented a loss of about 4.9 million tire units. Second, Goodyear executives believed that nearly 2 million worn out Goodyear brand original equipment tires were being replaced annually at some 850 Sears Auto centers. Goodyear executives believed the failure to repurchase Goodyear brand tires happened by default because Sears customers had such a remarkable loyalty to the company they were led to buy the best tire available that Sears had to offer, which did not include Goodyear brand tires. Problem: Primary: Goodyear’s primary problem lies within their current distribution...
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...Prince, and Benet & Klein (B&K). Prince mainly focuses on super-premium products. B&K entered the Nondisposable market in 1985. There are also new entrants which account for the rest of the market. In 2010 Paramount is expected to have a 21.4% dollar market share. * Company: Paramount is a large consumer products company with $7 billion in gross profit in 2009. The current Nondisposable razor line has products in both the market and value customer segments. The Clean Edge Razor is the first Nondisposable razor produced by Paramount that has a technological innovation. Paramount is relying on the Clean Edge Razor to increase sales and earn more market share in the Nondisposable razor category. * Context: In 2011 the effects of a recession are becoming less drastic than in years before. Customers have more disposable income and companies have more money to spend on investments such as media/advertising and R&D. * Collaborators (retailers): In 2009 food stores represented 42% of all...
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...Urban and Regional Innovation Research Unit Faculty of Engineering Aristotle University of Thessaloniki PRODUCT LIFE CYCLE MANAGEMENT IOANNIS KOMNINOS Electronic Engineer, B.Eng M.Sc.(Eng) Thessaloniki 2002 Product Life Cycle Management 2 CONTENTS INTRODUCTION PART 1: PRODUCT LIFE CYCLE MODEL DESCRIPTION 1. PRODUCT DEVELOPMENT PHASE 2. INTRODUCTION PHASE 3. GROWTH PHASE 4. MATURITY PHASE 5. DECLINE PHASE PART 2: ANALYSIS OF PRODUCT LIFE CYCLE MODEL PART 3: PRODUCT LIFE CYCLE TECHNIQUE EXAMPLE: PRODUCT CANNIBALIZATION 1. UNFAVORABLE CANNIBALIZATION 2. OFFENSIVE CANNIBALIZATION STRATEGIES 3. DEFENSIVE CANNIBALIZATION STRATEGIES PART 4: PRODUCT LIFE CYCLE IN RESPECT TO TECHNOLOGY LIFE CYCLE PART 5: USE OF PRODUCT MANAGEMENT FOR SUCCESSFUL PRODUCT LIFE CYCLE ANNEX 1 ANNEX 2 REFERENCES 3 4 4 5 6 7 8 9 12 12 13 14 16 18 20 23 25 URENIO - Urban and Regional Innovation Research Unit http://www.urenio.org Product Life Cycle Management 3 INTRODUCTION All products and services have certain life cycles. The life cycle refers to the period from the product’s first launch into the market until its final withdrawal and it is split up in phases. During this period significant changes are made in the way that the product is behaving into the market i.e. its reflection in respect of sales to the company that introduced it into the market. Since an increase in profits is the major goal of a company that introduces a product into a market, the product’s...
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...Urban and Regional Innovation Research Unit Faculty of Engineering Aristotle University of Thessaloniki PRODUCT LIFE CYCLE MANAGEMENT IOANNIS KOMNINOS Electronic Engineer, B.Eng M.Sc.(Eng) Thessaloniki 2002 Product Life Cycle Management 2 CONTENTS INTRODUCTION PART 1: PRODUCT LIFE CYCLE MODEL DESCRIPTION 1. PRODUCT DEVELOPMENT PHASE 2. INTRODUCTION PHASE 3. GROWTH PHASE 4. MATURITY PHASE 5. DECLINE PHASE PART 2: ANALYSIS OF PRODUCT LIFE CYCLE MODEL PART 3: PRODUCT LIFE CYCLE TECHNIQUE EXAMPLE: PRODUCT CANNIBALIZATION 1. UNFAVORABLE CANNIBALIZATION 2. OFFENSIVE CANNIBALIZATION STRATEGIES 3. DEFENSIVE CANNIBALIZATION STRATEGIES PART 4: PRODUCT LIFE CYCLE IN RESPECT TO TECHNOLOGY LIFE CYCLE PART 5: USE OF PRODUCT MANAGEMENT FOR SUCCESSFUL PRODUCT LIFE CYCLE ANNEX 1 ANNEX 2 REFERENCES 3 4 4 5 6 7 8 9 12 12 13 14 16 18 20 23 25 URENIO - Urban and Regional Innovation Research Unit http://www.urenio.org Product Life Cycle Management 3 INTRODUCTION All products and services have certain life cycles. The life cycle refers to the period from the product’s first launch into the market until its final withdrawal and it is split up in phases. During this period significant changes are made in the way that the product is behaving into the market i.e. its reflection in respect of sales to the company that introduced it into the market. Since an increase in profits is the major goal of a company that introduces a product into a market, the product’s...
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...Cookware: Pondering Price Promotion 1) Consultants Nonpromotion %20 promotion Unit 119,504 184,987 Price 72 62,4 Variable Cost 52.05 52.05 Profit Contribution 2,384,105 1,914,615 -469,489 (sales profit loss) -99,332 (cannibalization) 39,54 (inventory saving) Mrs.Brown -529,281 Nonpromotion %20 promotion Unit 59,871 184,987 Price 72 62.4 Variable Cost 38.64 38.64 Profit Contribution 1,997,297 4,395,291 2,397,994 (sales profit) I think that 2004 promotion was not profitable. Following reasons can be considered when deciding whether is it profitable or not besides calculations; -The promotion made retailers happy because they did not have to store free gifts and they were able to sell more products to the customers but I dont think it made customers that much happy because only %30 of the customers sets price as their first priority when they make purchase decision. - CX1 sales only increased in promotion period and it was not that high after the promotion. -Price discount might have damage brand image since it is aim is to compete in higher segment. -When it comes to cannibalization; I believe we do not have enough data. There may be negative effects of cannibalization in promotion’s success but we need more data to take into consideration. -The data also shows that price discounts are better attract cost sensitive customers but not quality and brand sensitive customers -This promotion was more helpfull to attract...
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