A product or service that becomes profitable in the market will almost always invite new players. As a business trend becomes increasingly popular, more and more enterprises tend to join the industry, and soon enough, the market becomes saturated.
If you’re an aspiring entrepreneur, the high demand and profitability of such businesses are very attractive. But how do you identify if the market you’re planning to enter is already saturated? And if so, what strategy can you use to be able to penetrate and survive this competitive atmosphere?
Moreover, if you’re already in this successful enterprise, how do you maintain status and hold your ground amidst increasing competition? What are the necessary steps to undertake that will help sustain profitability of your business? How do you find your edge in a market that’s tipping or has already reached saturation?
The first question we need to answer now is, how do you determine if the market is already saturated? Aside from conducting a comprehensive market research, these are the signs that you need to look out for:
- More and more businesses are offering the product or service
- It’s increasingly becoming a household name
- The price of the product or service is decreasing
- Innovations, cheaper alternatives and imitations of the product are coming out
- Marketing and advertising has increased for the product or service
Whether you’re just starting out or already in the business, penetrating a saturated market and surviving amidst stiff competition takes careful planning and execution. The following tips will offer you ideas on how to go about this:
- Keep existing customers by rewarding loyalty
- Explore new markets for the product or service
- Sustain profits with new offerings related to your business
- Reinvent or reposition the brand
- Tap alternative distribution channels (wholesale, retail sales, affiliate programs, etc.)
- Invest on research and develop innovations
- Explore measures on how you can decrease prices with minimal effect on profit
Personal Case Study 1: Making Money Online Blogs
There are hundreds thousands of blogs right now that teaches how to make money online. I did some market research on this and wrote a plan on how to penetrate this saturated market. So if I want to start a blog that teaches how to make money online, my strategy would be to choose and concentrate on a specific blogging income stream that’s not being comprehensively covered by exisiting blogs.
One good example would be writing sponsored reviews and paid posts. From one blog to another, all I read about this income stream are affiliate posts and invitations to join various get-paid-to-blog programs. I don’t think there exists a blog that genuinely talks about strategies and techniques on how you can maximize your earnings through this income stream.
Personal Case Study 2: Internet Cafe Business
The internet cafe business in the Philippines, specially in Metro Manila, is already saturated in my opinion. Nevertheless, more and more people are still putting up this business hoping to capture the likewise increasing population of internet users and online gamers. If you are an existing internet cafe owner, how would you sustain profitability?
First, you can increase consumer patronage by offering membership benefits to your internet cafe. Loyalty reward programs, perks and promos are viable means to keep your existing customers. Furthermore, you can upgrade your computer specifications to stay competitive with new shops who are most likely equipped with the latest processors.
Invest on LCD monitors which are more energy efficient than CRT models. You’ll be able to cut on electrical costs and possibly maintain your current profit margins if ever you plan to lower your PC rental rates. Explore other income avenues such as photocopying and selling electronic prepaid load. Lastly, develop your manpower. Most consumers are willing to pay a little more in exchange for better customer service.
I hope that you found these tips useful for your business, if you want more guides on how to put up a successful offline or online business, then please subscribe to Ready To Be Rich.
Photos courtesy of Coby Bidwell
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