Market Saturation: defined by the Sticky-Marketing.com monthly magazine |
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Market Saturation is when the quantity of products in use in the market place is close to or at its maximum. In most markets there is a limit to the number of items which the market is likely or able to buy. When the saturation point is reached supplying organisations must rely on replacement business where items in use in the market have to be replaced as they get old, perhaps malfunction or when users want to upgrade to a later version of the item. Further producers have to compete more aggressively with alternate companies because there are no new users left to the market and everyone will have become someones customer. This invitably means that sales volumes can be reduced from their level as the market was being penetrated with people buying their first example of that item. Clever marketeers will always try to ensure that there are significant upgrade benefits to try to persuade the population of owners of a product that they should buy a later version rather than keep their original item. You can clearly see examples in the markets for mobile phones, for personal computers and their software and for cars, a continual struggle to maintain persuasive reasons for past customers to buy a newer version. Tied to this concept of market saturation and drivers for upgrading is the idea of planned or built in obsolescence where the maker of an item plans that at some point in the future it will loose its value, become faulty or its life will come to an end. Light bulbs are a good example here, for not much more money you could buy a light bulb which would last pretty much indefinately but this would reduce the value of the repurchase market to the manufacturers. To be fair to light bulb manufacturers the expected lifetime of their products is getting longer so the effect in this market is not so noticeable. 17/08/2001 Use your browser back button or
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