What is market saturation?
Market saturation is economic terminology for a situation where a product is released and distributed into a market. How saturated that specific market becomes depends on how well it is received by consumers and, subsequently, their purchasing power. Other factors such as technology, competition and prices also all have an effect.
Where have you heard about market saturation?
Market saturation occurs in every consumer field. For example, a music magazine specialising in jazz could have its monthly subscription halted at 2 million, even though there are 10 million jazz fans in the USA. This is because its most profitable and natural consumption level has been reached.
What you need to know about market saturation.
The economist Thomas G. Osenton first introduced the Theory of Natural Limits in his 2004 book The Death of Demand: Finding Growth in a Oversaturated Market. He stated that “every product or service has a natural consumption level. We just don't know what it is until we launch it, distribute it, and promote it for a generation's time (20 years or more), after which further investment to expand the universe beyond normal limits can be a futile exercise”. In short, all products and services have their own natural level of consumption.
Find out more about market saturation.
To find out more about market saturation, see our page on flooding the market.