Cannibalisation case studies (marketing)

Question

Hi there,

I recently had a case study during an interview with a boutique strategy consulting company. The case was

The client would like to open a free duty shop at Hainan (a duty-free zone in China like Hongkong).

The question is could you estimate the cannibalization impact of the opening of a free duty shop in Hainan on other big cities of China (eg: Shanghai and Beijing)?

Clarification:

Industry of alcohol, whisky, wine and so on. (Mass products).

Current distribution channels:

B2B: on-trade (hypermarket, local tobacco boutique) and off-trade (hotels, bar, restaurants …)

B2C: online e-commerce

Currently, the sales come from 60% of Shanghai and 40% of Beijing.

NB:

We don't have the breakdown from B2B and B2C customers. we don't have historic data and comparison data (cities like Hongkong).

what should be the framework? How to solve it?

best regards,

A

Answer 1

Hey,

Please post your solution here and we can comment. You will learn better that way than us posting answers :)

Answer 2

Hi there,

Generally, when it comes to cannibalisation, you can break it down by products, customer, competition and leverage those lenses to identify what will occur.

Answer 3

Hey, can you provide some more colour on which industry segment? which are the other cities being considered as alternative mkts? what type of product are we looking at - mass or premium? etc. Such details will help us understand the case situation better so that we could help you better.

Answer 4

Hi Saeed, and thanks for your question, Now, to put it shortly, the answer is yes and no. It all depends on the conte... (read entire answer)

Hi Saeed, and thanks for your question, Now, to put it shortly, the answer is yes and no. It all depends on the context and the case. If you you already have a strong idea about... (read entire answer)