A Product Extension Model of Consumer Choice

An Asymmetric Cannibalism choice model based in the theory of individual choice behavior is presented and tested. This model, while predicting choice probability for a new product as a function of consumer reaction to tangible attributes and services, also explicitly estimates the asymmetric influence resulting from similar offerings of the same firm as well from similar offerings of competitor firms. Results indicate that the inclusion of these asymmetric influences does improve the fit to the data. In addition, cannibalism appears to exert an adverse and asymmetric influence on offerings in the market. Managers who ignore Asymmetric Cannibalism may introduce product extensions that have a negative impact on the financial viability of the firm given the added cost of product development.