COMMERCE 2MA3 Chapter Notes - Chapter 8: Market Saturation, Reverse Engineering, Brainstorming
17 Nov 2016
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New market offerings provide value to both firms and customers. But the degree to which they do so depends on how (cid:374)e(cid:449) the(cid:455) reall(cid:455) are. Whe(cid:374) (cid:449)e sa(cid:455) a (cid:862)(cid:374)e(cid:449) produ(cid:272)t,(cid:863) (cid:449)e do(cid:374)"t necessarily mean that the product has never existed before. Market saturation: the longer a product exists in the market place, the more likely it is that the market will become saturated. Without new products or services, the value of the firm will ultimately decline: saturated markets can also offer opportunities for a company that is willing to adopt a new process or mentality. At one point in time, mass marketers would not even consider entering a market that they believed would not earn at least. But general mills is looking to niche markets for its future growth. Managing risk through diversity: through innovation, firms often create a broader portfolio of products, which helps them diversify their risk and enhance firm value better than a single product can.
