What is cannibalization rate of all-over natural shampoo

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Assignment:

The local shampoo market is dominated by two brands: Clean Hair, which owns 54% of the market, and Sassy, which owns the remainder. A new brand, All-Over Shampoo, manufactured by the same makers of Sassy, is attempting to break into the shampoo market with an all-natural shampoo that they claim will strengthen hair as it is washed. The local shampoo market volume is 2,848 bottles per month. All-Over Natural Shampoo sells 436 bottles in their first month. The total market for shampoo is mature and no growth is expected to result from All-Over's entry. Variable costs for All-Over Shampoo are estimated at $2.60 per bottle, with a selling price of $4.73.

What is the cannibalization rate (the percentage of new product sales coming from an existing product) of All-Over Natural Shampoo on the Sassy brand?

Reference no: EM133230797

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