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:
- Stage 1. Survival
- Stage 2. Quality
- Stage 3. Convenience
- 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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