Application: Strategic Insight into Market Development, NPD/NSP, Communications Strategy
The phenomenon of market maturity reflects changing patterns in demand and supply, and occurs when there are multiple suppliers and multiple buyers in a market. It is normally represented by an S-curve (as in Figure M.1 above) and, as a result, is frequently confused with the “product life cycle” of individual offers. This is also closely related to (and often muddled up with) a sociological phenomenon called “the diffusion of innovation”. (The latter is directly relevant to marketers because the products and services their companies offer are themselves part of innovative groups of offers which are diffusing across different societies in the world at different speeds.) Market maturity, though, is something distinct and different, the implications of which marketers need to understand.
This concept draws an analogy between biological life cycles and the sales growth of successful product groups, by suggesting that they are born, introduced to a market of human beings, grow in sales, mature (sales growth stops but profit growth continues), and then decline (sales fall). This organic analogy is probably relevant ...