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I believe that there definitely is a third case where under-served markets exist. I am referring to complacent suppliers. You suggested it when referring to "terrible marketing."In some cases there are "under-served markets." It's not necessarily that there is no supply anywhere, but there may be no "path" to the supply. In my experience these appear when:
The latter is one of my favorite occurrences. Yes, the "barrier" makes it difficult to meet the need, but when you do, you can often avoid excessive competition. Meanwhile, people who are looking for "low lying fruit" are shoulder to shoulder licking at where the low lying fruit is supposed to be.
- People need something that they do not know they need, so you can inform them of their need.
- People need something, but there is a barrier to entry for providers of that thing.
Example: I built a niche selling to dermatologists, tattoo-removal businesses, and medi-spas. The product existed, and at least some of the businesses knew they needed it. After I sent a few letters and exchanged some calls, they all knew how much they needed it.
But it was harder to understand and explain than a lot of similar products. It was technical. You had to know something (not that anyone couldn't learn it). And you had to find the somewhat obscure suppliers. And you had to translate the terrible industry jargon into problems and solutions and scenarios that humans can understand. So I did all that, and it was great. I didn't have to "sell" at all... the clients needed my attention.
I think I stumbled on that niche by looking at the terrible flyers made by the suppliers. Most people selling the products I sold at the time would not make the effort to understand them. They were terrible. So terrible marketing on the part of a supplier of a useful product could be one way to find what you're looking for, I think.
This is so true!I believe that there definitely is a third case where under-served markets exist. I am referring to complacent suppliers. You suggested it when referring to "terrible marketing."
Ahahahahaaaa! This makes me laugh because I have seen so many of these same flyers. Why do they even call it marketing? People who do this are just increasing demand for the trash collection industry.Wonderful Zenith Company
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Complacent suppliers have nothing to do with market dynamics. Is it a determining factor in entering the market? Of course, but it doesn't hold water for long.I believe that there definitely is a third case where under-served markets exist. I am referring to complacent suppliers. You suggested it when referring to "terrible marketing."
How did the iPhone create its own demand?Market equilibriums are the entire basis of self regulating, free Enterprise, capitalism. The condition in the market you want to find does not exist naturally. Something creates it and it's temporary.
One way to do it is to create new demand and serve it. For example... iPhone and GoPro. Or serve a newer, immature market that someone else created. For example Tesla.
The only other way this occurs is during a shortage. If you can get product when your competition can't, that is a good thing. Or a new alternative to the product experiencing a shortage.
Apple created the market for touchscreen smartphones. Demand for an esoteric smartphone with similar capabilities may have existed prior to Apple creating the iPhone, but it was undefined, abstract and unmeasurable. Much like a flying car now.How did the iPhone create its own demand?
Isn't it that there was an unsaid demand for a device with the functions of an iPhone (many capabilities, a camera, simplicity, etc.), which was filled by Apple?
If I created a portal, I would be supplying the demand for faster travel. I wouldn't be creating a demand for faster travel, it was already there.
But you say that a low supply with a high demand only occurs unnaturally.Apple created the market for touchscreen smartphones. Demand for an esoteric smartphone with similar capabilities may have existed prior to Apple creating the iPhone, but it was undefined, abstract and unmeasurable. Much like a flying car now.
I'm talking in economic terms. For all intents and purposes, Apple created the demand.
I didn't say that actually. I said it's not a condition that occurs naturally, something created it and it's temporary. Is a $10 4k TV currently a natural occurance in the marketplace?But you say that a low supply with a high demand only occurs unnaturally.
There is a high demand for a fully functional $10 4k TV, but there is a very low supply. What is unnatural about this?
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So what created the high demand was the consumers' desire for a more immersive way to watch football, and the low supply of products to fill their desire was caused by something, x?There's even a demand for fully immersive 3d TV room. Stand in the middle of the football game and watch your favorite payer make the tackle! But maybe there's only one guy in Bulgaria who happens to make them, and the cameras for them, and so far he's a failure at communicating what he has, or teaching anyone else to make them (speaking hypothetically... don't actually go looking for him in Bulgaria).
Using a case like this to illustrate, you could say the condition is unnatural or "something created it" -- poor communication, language barrier, only one guy/company willing to do the work. But it's an imbalance. And while I admire many things about markets and place a lot of trust in them, they don't always pick up on every opportunity. I've seen very good products that missed the market because the communication of an offer was poorly executed. Worse, after that there may be capable innovators who assume that product failed because "the market didn't want it," rather than that the execution was bad. It can take a long time to see the same product again.
Temporary? Yes, everything is temporary.
Yes, imbalances work out. It is far easier to see in a commodity market where if you sold something for 1% under market, it would sell immediately and 1% over it would almost never sell. EX: High oil prices will drive production which drives prices back down. It's a cause and effect relationship that balances the equation over time. The movements are the opportunity.So what created the high demand was the consumers' desire for a more immersive way to watch football, and the low supply of products to fill their desire was caused by something, x?
So what isn't natural about this imbalance?
Oh wait, so are imbalances themselves unnatural in capitalism? So is the term "natural" used to describe the state in which supply meets demand?
Right. I think this changes how you look at things, because the quickly self-balancing supply/demand nature of free markets applies well to things that are already commoditized. But for things that the market still sees as new or better than what they have, imbalances between supply and (hypothetical) demand can grow, and exist for a long time, and exist for various reasons, some of which are not simple production capacity or manufacture cost.This is honestly a "good ideas" thread where we are seeking something that might have good demand once provided
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