What is Market Saturation?

Market saturation is the maximum sales volume for a product or service under current market conditions assuming a constant level of demand.

How Does Market Saturation Work?

When the number of units of a given product or service has leveled off, resulting in a decline in further sales, that product or service has reached its market saturation. Market saturation is determined by market demand as well as economic climate and market competition. For example, a given product may reach market saturation because there is a drop in consumer confidence or, alternatively, because it is outdated and no longer needed.

Why Does Market Saturation Matter?

Market saturation is a signal to producers that they must take action to generate further sales. This could simply be a change in marketing strategy that generates additional demand, or it could be a modification of an existing product design.

Ask an Expert about Market Saturation

All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Market Saturation.

Be the first to ask a question

If you have a question about Market Saturation, then please ask Paul.

Ask a question
Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

Verified Content You Can Trust
verified   Certified Expertsverified   5,000+ Research Pagesverified   5+ Million Users