Question

Market saturation occurs when everyone who wants the product has purchased it and demand declines. When products decline in the US market, there is often a whole new market in developing countries. Here, products must be sold more cheaply to compensate for lower consumer income.

What can a company do when it sees a product reaching market saturation?

SUBJECT: Marketing

Answer 1

When market saturation takes place, then it means that market is not expanding. In this scenario, the company can take different initiatives. The first initiative is to innovate and come up with products that have distinctive and specific features, making people to buy the new products. It helps company restart the product life cycle with the new product and market for the new product, grows. The second initiative is the tap those target audience that are still not tapped by the company. It can be done, by offering discounts and or linking the products with some other plans so that price of the product can be recovered over a period of time. The third initiative is to launch the product in new overseas market. It is done expertly by Apple. When developed market has iPhone X, then in developing countries still has special additions of iPhone 5, 6 and 7 at a lower price and company is reaping the reward. So, new markets can be identified either in the home country and or other overseas market.  The fourth initiative is to give an exchange offer to the existing customers to accelerate the sale of new products.

Above initiatives should be taken up by the company.