Market Saturation

What it is:

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

How it works/Example:

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product may reach market saturation because there is a drop in consumer confidence or, alternatively, because it is outdated and no longer needed.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 it Matters:

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.

Best execution refers to the imperative that a broker, market maker, or other agent acting on behalf of an investor is obligated to execute the investor's order in a way that is most advantageous to the investor rather than the agent.