10 Aug How to be a Player in Saturated Markets
With the advent of globalization, take a look around your local neighborhood; there are bound to be at least two businesses offering the same product. Yet, one would be raking in about a hundred customers a day, while the other would be lucky to score more than a dozen orders. So what went wrong with the other business? Let’s have a look at a common problem that most businesses especially new businesses fail to take into account and need to be very much aware of; market saturation.
So we all know Italy is the birthplace of the beloved pizza pies, with Italian pizzerias being revered around the world. Yet, quite a lot of pizzerias in Italy go out of business within the first five years of their establishment. What may be the cause of that? After all, if pizzas don’t sell in Italy, where else would they sell? The answer is simple; the market is too saturated.
Impact of Choice
There are about a hundred pizzerias being operated in Sicily alone, so customers are left with numerous choices at hand and this is where it gets confusing; choice confuses people. This isn’t something just made out in the air. It is actually a psychological fact that given too many choices, people are bound to get confused and may not be able to make the best decision. In fact in recognition of this, business giants such as Coca-Cola offer numerous variations of the same products marketed under a different brand name. So even if you are offering a better product than the competing businesses, your business may not be as successful as other established businesses due to the saturated marketed. Customers may prefer the competing business simply because they are older and have a more established reputation. So how do you play in a saturated market.
The first answer to that would be to look around the location you plan on serving and see what businesses offer services similar to yours. If there are too many businesses, consider targeting a different area. However, if you are bent on competing with the numerous businesses within the area, you need an ironclad strategy like a unique marketing offering or a price and quality positioning which ensures you don’t end up as one of the numerous others.
Make Your Business Unique
Finding ways to market your business as something different to the rest is easier said than done. A good way to do this is to thoroughly research the competing brands to know what they are doing right, what they are doing wrong and also the market demographic they are targeting. For example, assuming you are planning on opening up a roof tiling business and there are more than a dozen similar services within the area and all of them are trying to target commercial clients with special discounts on warehouse tiling etc. You can differentiate your tiling business by targeting a less saturated demographic i.e. residential. Sure, you would be offering commercial services too, but the former would be your niche, as customers always want something that specializes in their particular requirements.