Question

When Coca-Cola launched a differing soda product line that includes: regular coke, cherry coke, vanilla coke, coke zero, etc. next to its signature drink, Coke, the company ran the risk of _______. This occurs when the introduction of a new product causes a decrease in the sales of another product within the same company. The goal is to acquire larger market share.

Answer 1

Answer:

The correct word for the blank space is: market cannibalization.

Explanation:

Market cannibalization refers to the loss of revenues as a result of the introduction of a new product by the same company. The initial purpose of the firm is to spread its market share but the product introduced is so similar or covers the same need than the previous that it ends up replacing it instead of acquiring more consumers.  

Market cannibalization also takes place when franchises of the same firm open stores too close to each other than one of them ends up capturing all consumers which replace the first store operating in the area.