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Product cannibalization and the role of prices

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  • Lindsay Meredith
  • Dennis Maki

Abstract

The role of brand prices in contributing to product cannibalization is examined. Price elasticities and reference price theory are used to provide a theoretical foundation and empirical test for the impact of a firm's cheap brand on one of its expensive brands. Results are consistent with the conclusion that the market share of the company's premium brand was cannibalized by a growth in sales of its cheap brand.

Suggested Citation

  • Lindsay Meredith & Dennis Maki, 2001. "Product cannibalization and the role of prices," Applied Economics, Taylor & Francis Journals, vol. 33(14), pages 1785-1793.
  • Handle: RePEc:taf:applec:v:33:y:2001:i:14:p:1785-1793
    DOI: 10.1080/00036840010015769
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