4 Stages of Market Maturity

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4StagesOfMarketMaturity

You can tell the maturity of a market by the consumer patterns. 

If you know the life cycle stages of a market you can better anticipate what level of “needs” your product needs to match to be successful. 

(I always think of needs in stages like Maslow’s hierarchy of needs.)  

In the Autumn Special Edition of strategy+business magazine,  Alonso Martinez and Ronald Haddock describe how a country evolves from a developing nation to an industrialized nation.

Key Take Aways

Here are my key take aways:

  • Know the 4 stages of maturity.  The 4 stages are: 1) survival, 2) quality, 3) convenience, 4) customization.
  • Know which stage you are in.  In a global market, know where you are in the stack.  What might be stage 4 in your country might be stage 1 for another, or vice-versa.  If you’re behind, then you can model from another country.  if you’re in the lead, then you have opportunity.
  • Know the stages to help you anticipate.  When you evaluate a job situation or a product, ask yourself where what stage that same thing is in another part of the world, to help you get perspective.  You can compare patterns and practices in any area (health, quality of life, education … etc.)

I think to successfully anticipate global market needs, you need to understand where in the stack, various consumers are.   I’ve noticed a lot more attention on customization, particularly in social software and personal devices.  You can actually see market maturity, specialization, and saturation in action.

The Four Stages of Market Maturity

According to Martinez and Haddock, the 4 stages of market maturity are:

  1. Stage 1. Survival
  2. Stage 2. Quality
  3. Stage 3. Convenience
  4. Stage 4. Customization.

From Survival to Customization

Martinez and Haddock write:

“As a country evolves from developing nation to industrialized nation, the population’s basic needs pass through four distinct stages.

In developing countries, most of the population is preoccupied with basic survival – obtaining adequate food, shelter, and clothing. (Much of sub-Saharan Africa is in the stage right now.) 

As a middle class emerges, people seek greater quality in their food, housing, and clothing (This is currently happening, for example, in much of China and India.) 

Once a transitioning market’s population can afford relatively high quality, they begin to seek convenience; they buy time-saving appliances and processed foods, and they may move closer to work.  (This stage is emerging today in Eastern Europe and Latin America.) 

Finally, as the market graduates into the realm of developed nations, the population wants customization; with needs for survival, quality, and convenience now met, people will spend a premium (as many do in North America, Japan, and western Europe) to satisfy individual tastes and desires.”

This is a recurring cycle that once you recognize it you’ll see it show up in various aspects of your life (and in the market.)

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7 COMMENTS

  1. At first I thought this was on a different topic. In addition, it’s good to know where a product might be produced based on it’s market maturity. As a country matures, the products it produces change. Products produces in Stage 4 countries commonly pass to stage 3 and then stage 2 countries.

    The stages for a given product are
    1. Idea
    2. Foothold
    3. Common usages
    4. Commoditization

    Commonly stage 4 (Customization) countries have much more free time on their hands. They aren’t spending the time surviving and have enough products of convenience to afford them free time and the ability to specialize into a work area.

    As a result of this free time, creative ideas emerge. Those ideas are produced in that stage 4 country during the start up process, when it’s labor intensive. That idea becomes a product/discipline and will gain a foothold or not. Once the product/discipline enters common usage, methods and process for creating the product or outlining that discipline become standardized. At that point, it can be commoditized and usually is sent where the costs of manufacture are lower. By manufacture, we can mean “educate” as well.

    We’ve seen this happen in the US with textiles, automobiles, toys computer chips, call centers, computer support, computer programming and testing, and more. I’m waiting for it to happen with certain healthcare areas as well.

    It’s something to keep in mind when looking at what you want to do as a career as well.

  2. @ Rob

    Nice walk through of a product maturity model! I think it really helps to show that everything around us is always in a cycle. Life’s not static. Neither are the systems we are in and it helps to know the cycles of the systems.

  3. Hi J.D.

    Survival is the start of all things. Once that happen, we started to want better qualities. Then we want it faster and easier. Lastly, how can we make it fit better. Great post.
    Thank you,
    Giovanna Garcia
    Imperfect Action is better than No Action

  4. Excellent, as always. And always I try to put this in the perspective of what do I have to offer by way of music.

    1. Survive the concept of a new song. (They don’t always make the cut. Probably only 1 idea in 10 makes it to a finished song or a concept that I deem worthy of completion.)
    2. Hone it until it is as good as song as I can make it. No compromises!
    3. Make it easily accessible to the listener in vocal and instrument arrangement as possible. Simpler is generally better.
    4. Be in the moment – a song takes on new character each time it is customized in a live performance.

    Not bad, eh?

  5. @ Giovanna

    Thank you. It’s about moving up the stack. Related to survival, one of the sayings we use on our team is “water in the desert” to mean the demand is high and it’s such as basic need that people aren’t going to be picky.

    @ Jannie

    Very nice. I like the way you personalized it and took it to the next level.

  6. > They aren’t spending the time surviving and have enough products of convenience to afford them free time and the ability to specialize into a work area.

    On a national scale, this is true. For example, largely agrarian economies tend to be more survival-oriented. So, this …

    > As a result of this free time, creative ideas emerge.

    …applies on a national scale, but does it at a corporate product scale?

    On a corporate scale, Step 4 is usually a trend into lethargy and complacency, no? It almost (if not always?) requires “churn” of leadership/management to bring in fresh ideas and practices to innovate in Stage 4, doesn’t it?

Comments are closed.