WHY NEW MARKETS MATTER
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What defines a new market How new markets create big industries How new markets build great companies Why ignoring new markets is perilous How new markets can become a source of corporate renewal What trends make new markets particularly critical today
What Is a New Market? • • • For the purpose of this subject, our focus is on markets that have not existed previously. It is concerned with tapping latent demand to create new sources of consumption. A new market might cannibalize some of the old, but it also expands overall consumption. If fighting competitors for share is a zero-sum game, new markets are about positive sums that create economic growth.
General Ways to Create Market Growth • New customers. A new market often will lead to people or institutions buying products or services that they had not purchased before. Sometimes these products may be new-to-the-world. • New consumption occasions. A new market also may result from new consumption occasions. Colgate created a new market with its Wisp toothbrush, an ultraportable single-use brush meant to be used on the go. New products, services, or technologies do not necessarily lead to new markets. They key distinction is whether they ultimately lead to new consumption.
New Markets Create Big Industries • Over the past 50 years, economy has gone through waves of transformation. An agriculturally oriented nation had already given way to one focused on manufacturing. Services then become predominant. Information and communication became vastly larger components of GDP than before. The makeup of the economy and size of key industries have shifted enormously. While many observers grasp the potential of new technologies to create industries, one of the most stunning facts about new markets is that some of the greatest successes have come from relatively low-tech offerings.
Culled from the book, Capturing New Markets: How Smart...