Product cannibalization: a case study

Session Title

Session 1-3-C: Lightning Talks

Presentation Type

Lightning Talk

Start Date

23-5-2023 1:45 PM

End Date

23-5-2023 3:15 PM

Disciplines

Business Administration, Management, and Operations | Marketing

Abstract

Corporate cannibalization is a marketing phenomenon that occurs when a product’s sales decrease in volume or market-share due to the release of a new product that is introduced by the same company. The new product then absorbs demand for the old product therefore reducing its sales. When considering institutions that operate in monopolistic, oligopolistic, or highly regulated markets as is the case with lotteries, it may be expected for the gambling activity to grow by the expansion of total demand. Very few studies so far have focused on the impact of new lottery games on other preexisting lottery games. The present study is the first to assess for the impact of cannibalization on the Portuguese national lottery portfolio and is also the first to include games such as passive lotteries. Results showed that cannibalization was found at the product category level and for individual products. Scratch-cards was the product that most cannibalized other products because it cannibalized most other games. Complementarity for product category and individual products was found. The national lotto correlated positively with EuroMillions’ except for situations when there was a rollover than increases one of these games’ jackpots The present study brings new findings that complement previous research on lottery cannibalization.

Keywords

Lottery gambling; longitudinal Analysis; panel data; product cannibalization.

Author Bios

Senior Product Manager at the Portuguese National Lottery and Invited Assistant Professor of at ISEG - Lisbon School of Economics & Management. Chagas is a member of the ADVANCE - CSG/Research in Social Sciences and Management research unit of the University of Lisbon. His research focuses mainly on marketing, business strategy and entrepreneurship. His work has been published in international peer review journals and conference proceedings. He has also tutored several Master degree Students.

Funding Sources

none

Competing Interests

no competing interest

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May 23rd, 1:45 PM May 23rd, 3:15 PM

Product cannibalization: a case study

Corporate cannibalization is a marketing phenomenon that occurs when a product’s sales decrease in volume or market-share due to the release of a new product that is introduced by the same company. The new product then absorbs demand for the old product therefore reducing its sales. When considering institutions that operate in monopolistic, oligopolistic, or highly regulated markets as is the case with lotteries, it may be expected for the gambling activity to grow by the expansion of total demand. Very few studies so far have focused on the impact of new lottery games on other preexisting lottery games. The present study is the first to assess for the impact of cannibalization on the Portuguese national lottery portfolio and is also the first to include games such as passive lotteries. Results showed that cannibalization was found at the product category level and for individual products. Scratch-cards was the product that most cannibalized other products because it cannibalized most other games. Complementarity for product category and individual products was found. The national lotto correlated positively with EuroMillions’ except for situations when there was a rollover than increases one of these games’ jackpots The present study brings new findings that complement previous research on lottery cannibalization.