Don’t Get Eaten! Understanding and Handling Cannibalization Risk

2018 ◽  
Vol 10 (1) ◽  
pp. 34-39
Author(s):  
Charlotte Mason ◽  
Kaushik Jayaram
Keyword(s):  
Market Share ◽  
Distribution System ◽  
New Products ◽  
New Product ◽  
Lower Margin ◽  
Relevant Variables ◽  
Potential Loss

Abstract To minimize the potential loss of market share and profits, it is important to understand factors that drive cannibalization. Key brand variables for cannibalization risk concern how the new product compares in price and quality to existing products. Other relevant variables are the category, the type of product and a company’s distribution system. Also, whether a new product will coexist with or replace the existing product needs to be considered. Estimating cannibalization risk should assess possible effects on company operations. The positioning of new products needs to be planned and communicated carefully. Too many similar options may confuse the consumer. Brand and category factors as well as the consumption context can help managers mitigate the extent of cannibalization. Profit impact is more relevant than changes in sales figures. A lower-margin product cannibalizing a higher-margin product eats away at profits, but a higher-margin product cannibalizing a lower-margin one is potentially worth the cannibalization risk.

Strategic Remanufacturing under Competition

2019 ◽  
Vol 16 (1) ◽  
pp. 85-107
Author(s):  
Zhongwen Ma ◽  
Ashutosh Prasad ◽  
Suresh P. Sethi
Keyword(s):  
Utility Maximization ◽  
New Products ◽  
New Product ◽  
Substitution Effects ◽  
Symmetric Equilibrium ◽  
Lower Margin ◽  
Demand Functions ◽  
Customer Preferences ◽  
Representative Consumer ◽  
The One

Abstract We investigate firms’ remanufacturing strategies for the case of a duopoly. On the one hand, remanufactured products cannibalize sales of new products of the same firm thereby hurting its profits. On the other hand, they can be part of a profitable marketing strategy that targets different customer preferences by providing a larger number of alternatives to customers. This paper studies the tradeoff between these effects and how it is influenced by competition. We develop a model where demand functions for new and remanufactured products of each firm are derived from utility maximization by a representative consumer. This allows us to capture preference and substitution effects between all offered products in the market. We discuss how equilibrium strategies are affected by factors such as competition, substitutability, production cost as well as remanufacturing cost. For example, when competitive intensity between new and new products, and remanufactured and remanufactured products, is (high), both (neither) firms offer remanufactured products in a symmetric equilibrium. If substitution between new and remanufactured products of the same firm is low, but the remanufactured product has a lower margin than the new product, firms can be worse off from remanufacturing.

Pharmaceutical innovation and market share: evidence from a generic market

2016 ◽  
Vol 10 (4) ◽  
pp. 376-389 ◽  
Author(s):  
Nazila Yousefi ◽  
Gholamhossein Mehralian ◽  
Hamid Reza Rasekh ◽  
Hossein Tayeba
Keyword(s):  
Pharmaceutical Industry ◽  
Product Development ◽  
New Product Development ◽  
Market Share ◽  
Historical Data ◽  
Expert Panel ◽  
New Products ◽  
New Product ◽  
Pharmaceutical Market ◽  
Content Type

Purpose Pharmaceutical market value in Iran exceeded to more than US$4bn in 2013, indicating annually over 20 per cent growth. In the past decades, Iranian pharmaceutical industry was supported by government policies, namely, generic substitution, import limitation and local production support; however, the local pharmaceutical manufacturer’s market share in value has been decreased gradually. This study aims to provide historical data on Iran pharmaceutical market to show the importance of new product development to attain greater market share and tries to motivate the pharmaceutical industry located in developing countries to develop more innovative medicines. Design/methodology/approach This is a descriptive cross-sectional study that investigates the Iranian pharmaceutical market by focusing on new products over a five-year period (2009-2014), and that was augmented by an expert panel to rank subjectively firms’ performance indicators to shed light on the importance of new product development to firms’ performance. Findings The expert panel results find out that new product development is one of the most important “result indicators” for Iranian pharmaceutical companies. Historically, in line with the experts’ opinion on the new product development, the Iranian pharmaceutical industry has shown its capability to develop new medicines by developing 3,095 new products (mostly new-to-firm) across about 100 firms. Despite this fact, the share of local manufacturers in new medicines’ market decreased from 52 per cent at the beginning of studied period to 24 per cent at the end, and the gap between the unit value of imported and domestically produced medicines has been significantly increased due to low-innovative medicines locally produced. Research limitations/implications This research was challenged with limitations such as lack of reliable published data on new medicines in the Iran pharmaceutical market. Practical implications This study highlights the fact that developing more innovative products in the generic pharmaceutical industry such as Iran can grant its market share. Originality/value This is an original study that shows the effect of innovative product development on market share through historical data.

scholarly journals Estimating the Market Share for New Products with a Split Questionnaire Survey

2021 ◽  
Vol 26 (1) ◽  
pp. 7
Author(s):  
Simone Balmelli ◽  
Francesco Moresino
Keyword(s):  
Conjoint Analysis ◽  
Market Share ◽  
Questionnaire Survey ◽  
New Products ◽  
Perceived Value ◽  
New Product ◽  
New Method ◽  
Traditional Methods ◽  
Market Shares ◽  
Alternative Approach

When designing a new product, conjoint analysis is a powerful tool to estimate the perceived value of the prospects. However, it has a drawback: when the product has too many attributes and levels, it may be difficult to administrate the survey to respondents because they will be overwhelmed by the too numerous questions. In this paper, we propose an alternative approach that permits us to bypass this problem. Contrary to conjoint analysis, which estimates respondents’ utility functions, our approach directly estimates market shares. This enables us to split the questionnaire among respondents and, therefore, to reduce the burden on each respondent as much as desired. However, this new method has two weaknesses that conjoint analysis does not have: first, inferences on a single respondent cannot be made; second, the competition’s product profiles have to be known before administrating the survey. Therefore, our method has to be used when traditional methods are less easily implementable, i.e., when the number of attributes and levels is large.

New Folk Music as Attempted Repatriation in Romania

2018 ◽  
pp. 436-452
Author(s):  
Maurice Mengel
Keyword(s):  
Mass Media ◽  
Folk Music ◽  
Cultural Policy ◽  
New Products ◽  
New Product ◽  
The State ◽  
State Institutions ◽  
The Public ◽  
Socialist State ◽  
New Form

This chapter looks at cultural policy toward folk music (muzică populară) in socialist Romania (1948–1989), covering three areas: first, the state including its intentions and actions; second, ethnomusicologists as researchers of rural peasant music and employees of the state, and, third, the public as reached by state institutions. The article argues that Soviet-induced socialist cultural policy effectively constituted a repatriation of peasant music that was systematically collected; documented and researched; intentionally transformed into new products, such as folk orchestras, to facilitate the construction of communism; and then distributed in its new form through a network of state institutions like the mass media. Sources indicate that the socialist state was partially successful in convincing its citizens about the authenticity of the new product (that new folklore was real folklore) while the original peasant music was to a large extent inaccessible to nonspecialist audiences.

Entrepreneurial Bricolage and New Product Development Performance in New Ventures: The Contingent Effects of Founding Team Involvement

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Xinchun Wang ◽  
Xiaoyu Yu ◽  
Xiaotong Meng
Keyword(s):  
Product Development ◽  
New Product Development ◽  
Resource Constraints ◽  
New Ventures ◽  
New Products ◽  
New Product ◽  
Strategic Decision ◽  
Entrepreneurial Bricolage ◽  
Founding Team ◽  
Npd Performance

Abstract New product development (NPD) performance is a key determinant of a new venture’s success. However, compared with established firms, new ventures often suffer from resource constraints when developing new products. Entrepreneurial bricolage is reported in the literature as an alternative strategic option that enables managers to overcome resource constraints when developing new products. However, because new ventures are often founded by an entrepreneurial team, the effectiveness and efficiency of using bricolage to improve NPD performance might be contingent on how the founding team plays its roles in this process. Using data from 323 new ventures in China, we find support for the critical role of entrepreneurial bricolage in improving NPD success under resource constraints. More importantly, our results reveal that the bricolage strategy is more likely to benefit a venture when the founding team is composed of members with diverse functional backgrounds and is not heavily involved in strategic decision-making.

New product and emerging business growth in Kwara State

2016 ◽  
Vol 12 (3) ◽  
pp. 207-227 ◽  
Author(s):  
Seun Oladele ◽  
Femi Oladele
Keyword(s):  
Market Share ◽  
Manufacturing Industry ◽  
Service Industry ◽  
New Product ◽  
Sales Volume ◽  
Test Results ◽  
Business Growth ◽  
Content Type ◽  
Product Service ◽  
Service Portfolio

Purpose – The purpose of this paper is to examine the effect of new product on growth of emerging businesses (EBs) through sales volume and market share. Design/methodology/approach – The study surveyed 137 EBs in Kwara State. Two hypotheses were formulated and tested using correlation and regression analyses. Findings – Results show that service industry is dominant among EBs while the manufacturing industry trails. Many EBs are aware of the complexities of new product, its development and contribution to increasing sales volume, market share and ensuring competitive advantage with apparent infrastructural deficiencies. Test results show that there is a significant positive relationship and effect on sales volume and market share. Originality/value – Encouraging EBs to step up and focus on improving product/service portfolio to transform their fortune is explored giving focus to the benefits of increasing sales volume and market share.

The interactive effect of insight and cuteness in driving purchase likelihood: a lay belief of creativity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Felix Septianto ◽  
Rokhima Rostiani ◽  
Widya Paramita
Keyword(s):  
New Products ◽  
Interactive Effect ◽  
Experimental Studies ◽  
New Product ◽  
Underlying Mechanism ◽  
Content Type ◽  
Narrative Study ◽  
Managerial Implications ◽  
Purchase Likelihood

PurposeWhile new product introductions can potentially promote growth and benefit for brands, it remains unclear how marketers can develop effective communication strategies to increase the chance of success for new products. The present research investigates the role of cuteness in leveraging the effectiveness of a narrative emphasizing an insight versus an effort in this regard.Design/methodology/approachThis research presents two experimental studies. Study 1 examines the moderating role of cuteness on the likelihood of purchasing a new product featuring an insight-based (vs effort-based) narrative. Study 2 extends the findings of Study 1 using different stimuli and establishes the underlying mechanism.FindingsResults show that when a cuteness appeal is present, an insight-based (vs effort-based) narrative will lead to a higher purchase likelihood. However, these differences do not emerge when a cuteness appeal is absent (a control condition). Further, perceived brand creativeness will mediate this effect.Originality/valueThe findings of this research contribute to the literature on lay belief of creativity, cuteness, and product narrative, as well as managerial implications on how to promote new products.

Strategic delegation, quality competition, and new product profitability

2015 ◽  
Vol 53 (3) ◽  
pp. 713-729 ◽  
Author(s):  
Hyun Shin ◽  
Jongtae Shin ◽  
Shijin Yoo ◽  
Joon Song ◽  
Alex Kim
Keyword(s):  
New Products ◽  
New Product ◽  
Quality Competition ◽  
Strategic Delegation ◽  
Content Type ◽  
Financial Outcomes ◽  
Rival Firms ◽  
New Perspective ◽  
Duopolistic Market ◽  
Low Sensitivity

Purpose – The purpose of this paper is to present a new perspective on the marketing-R & D interface by modelling firms that develop new products in a duopolistic market. Design/methodology/approach – By using a game-theoretic modelling approach, this study examines strategic delegation, through which the marketing and R & D managers of each firm are given authority over pricing and new products’ quality levels. Findings – Interestingly, the study finds that the case where two managers with conflicting incentives negotiate (the horizontal coordination case) might produce a better financial outcome than when the managers’ decisions are perfectly coordinated by a profit-maximizing CEO (the vertical control case). In addition, the study identifies several conditions that guarantee horizontal coordination’s generation of higher profit, such as high (or low) sensitivity to the quality (or price) of a new product. The paper further shows that two competing firms may select horizontal coordination as a Nash equilibrium. Practical implications – These findings provide new insights into the role of marketing-R & D interaction under strategic delegation, which may allow rival firms to “spend smart” on R & D, avoid excessive (and unnecessary) quality competition, and thus enhance the profitability of new products. Such insights would be useful for any firms under budget constraints. Originality/value – To the authors’ knowledge, this paper represents the first attempt to analyze how delegation interacts with the conflicting incentives of marketing and R & D managers, which in turn affects the quality investment decisions, competitive intensity, and, ultimately, the financial outcomes of new products developed competing firms.

New Product Development in Malaysia: Does Organizational Background Really Matter?

2014 ◽  
Vol 68 (3) ◽  
Author(s):  
Tan Owee Kowang ◽  
Amran Rasli ◽  
Choi Sang Long
Keyword(s):  
Product Development ◽  
Research And Development ◽  
New Product Development ◽  
New Products ◽  
New Product ◽  
Multinational Companies ◽  
Product Performance ◽  
Survey Questionnaire ◽  
New Product Performance ◽  
Npd Performance

New Product Development (NPD) is vital in assisting Research and Development (R&D) based organizations to adapt to the changes in markets and technology for competitive advantage. Ensuring the success of new products and optimization of new product performance is critical and essential for Research and Development based organizations.  Hence, this study is carried out to explore does organizational background in term of company’s ownership (i.e. local or multinational companies) and operational scales (i.e. number of Research and Development staffs) affect NPD performance of Research and Development companies in Malaysia. In line with this, 8 New Product Development performance attributes were identified from literature review. These attributes were subsequently formulated into a survey questionnaire and responded by 186 respondents. Thereafter, the effect of organizational ownership and operational scale toward NPD performance are examined separately via Independent Sample t-test and Analysis of Variance (ANOVA). Finding from the study revealed that the level of NPD performance in multinational R&D companies is higher than local R&D companies. Findings from this research also implied that NPD performance can be further improved by increasing number of R&D staffs.  

Meta4acle: Generating Compelling Metaphors for Design

2008 ◽  
Author(s):  
Erik M. W. Kolb ◽  
Jonathan Hey ◽  
Hans-Ju¨rgen Sebastian ◽  
Alice M. Agogino
Keyword(s):  
Product Development ◽  
Case Studies ◽  
New Product Development ◽  
Team Member ◽  
New Products ◽  
New Product ◽  
Design Teams ◽  
Exploration Tool ◽  
Design Case ◽  
Positive Results

Metaphors have successfully been used by new product development and design teams to help frame the design situation and communicate new products to stakeholders. Yet, the process of finding a compelling metaphor often turns upon stumbling upon it or a flash of insight from a team member. We present Meta4acle: a Metaphor Exploration Tool for design that suggests possible metaphors to make the process more one of ‘seeking out’ than ‘stumbling upon’ an effective metaphor. The tool takes data about the project in the form of a title, domain and key associations required of the metaphor and returns suggestions from a database of possible metaphor sources. We built a Meta4acle prototype and evaluated it with positive results for three existing design case studies. We present plans for its full implementation and evaluation.

Sign in / Sign up

Export Citation Format

Share Document