From the time coffee was founded to know the commodity has changed a lot. Today it stands as the second most traded commodity in the US. The coffee industry has risen to the most popular grab go energy source.
Photo by Mike Kenneally on Unsplash
The Webster definition of profit cannibalization is in marketing strategy, cannibalization refers to a reduction in sales volume, sales revenue, or market share of one product as a result of the introduction of a new product by the same producer.
This is something that a lot of major businesses struggle with every day. When should we announce a new location? Is this location to close to the other location? How will these locations both stay open? These are great questions that many major companies face every day.
The difference is that as long as the product or service will increase in the long run, it is a good thing. For example, when Apple introduced the iPad, it took sales away from the original Macintosh, but ultimately led to an expanded market for consumer computing hardware.
Having the opportunity to grow your business within to have further growth isn’t such a bad thing. People sometimes have a misconception with long term. Profit cannibalization shows that you can lose on your basic cup of coffee to make the money back and some with a frozen coffee as well.
