what is market saturation 
market saturation arises when the volume of a product or service in a marketplace has been maximized at the point of saturation a company can only achieve further growth through new product improvements by taking existing market share from competitors or increasing overall consumer demand causes and market trendsmarket saturation can be microeconomic or macroeconomic from a micro perspective market saturation is when a specific market no longer exhibits new consumer demand for a company s product this occurs when a company has competition or reduces the market s need for its product or service from a macro perspective market saturation occurs when an entire customer base has been serviced and cannot acquire new customers many companies design their products to wear down or need replacement at some point to stop saturation for example new iphone models encourage consumers to replace older models constantly market saturation can force companies to change their revenue models especially when product sales slow ibm changed its business model toward providing recurring services once it saw saturation in the large computer server market 1company strategiesmany companies operate with market saturation when a company operates in a saturated market its product or service has to be more innovative than its competitors to entice customers to buy a company can also pivot to become the low cost provider of a product or service or decide to operate as a premium option for the product or service each strategy requires competitive pricing against other companies that choose the same pricing structure however companies that operate in a saturated market usually end up waging price wars with each other continuously undercutting prices to attract customers effective marketing strategies also help a company stand out in a saturated market when a market is saturated with product and service options especially when those options are somewhat homogeneous effective marketing is often the difference maker for a company examples of market saturationfads or trends market saturation happens when products or services in a particular market are no longer in demand due to multiple offerings by competition or simply less in demand a consumer s interest or desire can wane as a trend or fad winds down real estate a realtor operating in a saturated market can be challenging residential real estate markets ebb and flow depending on many factors when the market is saturated it often causes a drop in house prices and in turn a hit for realtors salaries that may rely on a commission percentage new rules for the national association of realtors expected to take effect in july 2024 may lower commissions for home buyers and sellers if a federal court approves the changes the standard 6 commission ends and sellers no longer have to propose compensation to prospective buyers and their agents nar will also require brokers to enter into written agreements with their buyers to help consumers understand what services will be provided and at what cost 2