market saturation

Examples of market saturation in the following topics:

• Maturity

  • During the maturity stage, sales will peak as the product reaches market saturation, and competition will grow increasingly fierce.
  • Competitors' products will begin to cut deeply into the company's market position and market share.
  • Demand for the product ultimately decreases due to competition and market saturation, as well as new technologies and changes in consumer tastes.
  • Brand differentiation and feature diversification is emphasized to maintain or increase market share
  • Identify the market conditions of a product in stage 3, maturity of the product life cycle.

• Ansoff Opportunity Matrix

  • Product development (existing markets, new products): McDonald's operates in the fast-food industry, but it frequently markets new types of burgers.
  • Marketing penetration - This growth strategy uses current products and current markets with the goal to increase market share.
  • Market development - This growth strategy uses existing products to capture new markets.
  • While market penetration may come with the lowest risk, at some point the company will reach market saturation with the current product and will have to switch to a new strategy, such as market development or product development.
  • Market development targets non-buying customers in currently targeted segments.

• Branding Strategies

  • A branding strategy helps establish a product within the market and to build a brand that will grow and mature in a saturated marketplace.
  • A branding strategy helps establish a product within the market and to build a brand that will grow and mature in a saturated marketplace.
  • For example, Intel, positions itself in the PC market with the slogan (and sticker) "Intel Inside. "
  • Frequently, the product is no different than what is already on the market, except it has a brand name marking.
  • Alternatively, in a very saturated market, a supplier can deliberately launch totally new brands in apparent competition with its own existing strong brand (and often with identical product characteristics) to soak up some of the share of the market.

• Marketing Orientation

  • Kohli in the "Journal of Marketing", marketing orientation is the, "The organization-wide generation of market intelligence pertaining to current and future customer needs, dissemination of the intelligence across departments and organization wide responsiveness to it. "
  • Following the second world war, it soon became obvious that products were not selling as easily as during the Industrial era due to a saturated market.
  • Marketing-oriented companies revolve around internal business processes that gather, synthesize, and package market intelligence into integrated marketing communications programs (i.e., advertising campaign, new product launch, promotional offer, etc.).
  • Competitive analysis is also a significant component of market orientation.
  • Since its introduction, marketing orientation has been reformulated and repackaged under numerous names including customer orientation, marketing philosophy, and customer intimacy.

• Stages in the Product Life Cycle

  • Nonetheless, sales may remain low because it takes time for the market to accept the new product.
  • Other competitors enter the market with alternative solutions, making competition in the market fierce.
  • The company that introduced the new product may begin to find it difficult to compete in the market.
  • In the decline stage of the product life cycle, sales will begin to decline as the product reaches its saturation point.
  • The market will see the product as old and no longer in demand.

• When to Modify Products

  • The product life cycle (PLC) encompasses the multiple phases products pass through during their 'life' in the market.
  • Products travel through market introduction, growth, maturity, saturation and decline, posing different challenges, opportunities and problems to manufacturers and sellers depending on industry and target audience.
  • At some point during the life cycle, products may be modified to compete more effectively in the market, and appeal to evolving consumer and business demand .
  • These product failures usually go back to the manufacturer for modifications, and are later re-introduced to the market.
  • Modification decisions often (but not always) happen before products are introduced to the market.

• The Diffusion of Innovation

  • Marketers are particularly interested in the diffusion process as it determines the success and failure of any new product introduced in the market.
  • Thus, it is quite important for a marketer to understand the diffusion process so as to ensure proper management of the spread of the new product or service.
  • With successive groups of consumers adopting the new technology (shown in blue), its market share (yellow) will eventually reach the saturation level.

• Promotional Objectives

  • There are three main promotional objectives: inform the market, increase demand, and differentiate a product.
  • The promotion mix is an element of the marketing mix.
  • Eventually a product will reach its saturation point, at which time investing in sales will decrease as the company focuses its attention on a new product.
  • Information about the product will differ depending on the specific target market.
  • In order for a market to accept a new product they need to know how it address their pain point.

• Selling Orientation

  • Approaching marketing with a selling orientation was popular for companies in the 1950s and 1960s.
  • However, after the untapped demand caused by the second World War was saturated in the 1950s, it became obvious that products were not selling as easily as they had been.
  • A marketing orientation centered around sales represented a major milestone in modern business.
  • In today's realm of marketing, selling has developed into a holistic business system required to effectively develop, manage, enable, and execute a mutually beneficial, interpersonal exchange of goods and services for equitable value.

• Brand Ownership

  • When you truly own your brand, your money is spent wisely on marketing that is targeted, sharp and effective because you have a sophisticated understanding of the marketplace, your product/service, your consumer base and your strategy.
  • This will translate into disciplined and effective brand management that will enable you to remain relevant in a rapidly-changing [and oftentimes saturated] marketplace.