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Product cannibalization and the role of prices

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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.
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Document Type: Research Article

Publication date: 2001-11-15

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