Market Analysis : Market Saturation Essay

1070 Words Mar 29th, 2016 null Page
Market saturation exists in a given industry when the available supply of goods equals or falls short of customer demand. A variety of factors, including more competition, lower market need and obsolescence, contribute to saturated conditions. The big drawback of operating in a saturated market is that it limits your profitability and growth potential. Market saturation happens when most of the prospective customers in a current market already use a product or service. It can be considered evidence of a successful sales campaign and indicates that the demand in the current market is satisfied or nearly satisfied. Once the market gets saturated with your products, the challenge becomes finding ways to continue generating income. Market saturation is a signal that a business needs to take action, which can include changing how they market your product or offer product upgrades.
Disadvantages of Market Saturation
Competition is seen as a major obstacle when talking about a saturated market. A saturated market usually means you have several competitors to deal with. Over time, as a market begins to be more attractive to suppliers and new companies look to target the same customer base. The competition that a company faces, will need to put in more cash to spend and stand out, likewise the more difficult it will be to get a substantial portion of the industry. If the products that a company offers are very similar to other products from its competitors, the market may be…

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