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Accelerator Principle: defined by the Sticky-Marketing.com monthly magazine

The Accelerator Principle is working when a given increase in demand in one market causes a greater increase or acceleration in demand in another.

The markets are usually related, it could be that the demand in one is derived from activity in another. Significantly just as demand accelerates harder in one market as another increases usually the inverse is also true. When the demand in the base market slows, the demand in the derived market will decelerate very quickly.

Examples of markets significantly accelerated by activity in another include:

The market for production machinery accelerates fast when general demand for produced goods grows and exceeds existing production capacity.

The market for subcontract electronics assembly accelerates fast when demand for electronics goods, such as computers and mobile phones, grows and reaches the productive capacity of the main manufacturers.

The market for airport baggage handling equipment accelerates fast when the market for air travel grows past the capacity constraints of existing terminals.

See also derived demand

06/08/2001 Use your browser back button or
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