Market Fragmenting

If you have ever studied marketing, you will have encountered a concept known as “The Product Cycle.” To quickly summarize this marketing concept, it is basically the histories of previous products being introduced to the marketplace and how the businesses and consumers around these products reacted as time passed. There are several well documented patterns (product cycles) that show up in a wide variety of businesses. Wise marketers will try to figure out what pattern best suits their new product and, using this history, strategize on how best to get profits—either for a few months or for a few decades. In essence, marketers employ business history to guide them to the right decisions.

The product cycle known as “Market Fragmenting” means a product or service initially available from one dominant business becomes available from many more businesses—as competitors are inspired by the profits of the dominant business. Sometimes this market fragmentation is a result of mismanagement by the dominant business for failing to protect its dominant share. Other times, marketing fragmentation is a natural force. If so, the dominant business needs to accept that it cannot continue to hold on to most of the market share, but it must strategize on how to best preserve as much market share as possible. It does this by identifying the needs of a core group of its current customers and ensuring that it caters to that group.

Return to “A Changing SNS Market”