Question at position 3 Adding a new product to an existing product mix may reduce the sales of a firm's existing products.Adding a new product to an existing product mix may reduce the sales of a firm's existing products.TrueFalse

Question

BlackTom AI · Accepted Answer

Question restatement: Adding a new product to an existing product mix may influence the sales of a firm’s existing products, and the prompt asks whether this effect is true or false.
Option 1: True. This statement aligns with the concept of cannibalization in product line management. When a new product is introduced within the same brand family or product category, some buyers who would have purchased existing products might switch to the new option, reducing the sales of the existing items. This is a recognized effect in marketing strategy, though the overall impact can vary depending on factors such as market segmentation, pricing, positioning, and consumer preferences. In short, introducing a new product can indeed cannibalize or reduce sales of existing products under certain conditions.
Option 2: False. If we consider only broad effects of adding a new product, one might argue there is no risk of reducing existing sales. However, this viewpoint overlooks the well-documented phenomenon of cannibalization within a product line, where substitutable products compete for the same customer base. While a new product can complement or expand overall demand in some scenarios, saying that it cannot reduce sales of existing products is inaccurate because it ignores potential internal competition and shifts in consumer choice.
Additional nuance: The magnitude and direction of impact depend on strategic choices such as whether the new product targets a different segment, whether it is priced to attract new customers, or whether it directly overlaps with existing SKUs. Nonetheless, the core concept supports the idea that adding a new product can reduce the sales of existing products in the portfolio under certain circumstances.

Question at position 3 Adding a new product to an existing product mix may reduce the sales of a firm's existing products.Adding a new product to an existing product mix may reduce the sales of a firm's existing products.TrueFalse

View Explanation

Log in for full answers

Similar Questions

Tesla’s Model Y dominates EV sales but shares many features with the Model 3, creating internal sales shifts. From a product strategy standpoint, this is best described as:

________ occurs when a new product or a new retail chain steals customers and sales from the organization’s older products and retail outlets.

Cannibalization would most likely occur if

________ occurs when a new product or a new retail chain steals customers and sales from the organization’s older products and retail outlets.

Whenever a product line or a product family is extended, there is a risk of ________, which occurs when sales of an existing brand decline as the firm's current customers switch to the new product.

In a consumer society, many adults channel creativity into buying things

Economic stress and unpredictable times have resulted in a booming industry for self-help products

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler