Usually a product with very low appeal makes few sales . However, when all the “good” products stock out, what is known as a Seller's Market is created. In a Seller's Market, customers will accept marginal products as long as they fall within the rough cut limits. For example, desperate customers with no better alternatives will buy:
A product positioned just inside the rough cut circle on the perceptual map– outside the circle they say “no” to the product;
A product priced $4.99 above the price range– however, at $5.00 customers reach their tolerance limit and refuse to buy the product;
A product with MTBF 4,999 hours below the range– at 5,000 hours below the range customers refuse to buy the product.
How can a company be sure of a seller's market? It can't unless it concludes that industry capacity, including a second shift, cannot meet demand for the segment. In that case even very poor products will stock out as customers search for anything that can meet their needs. See “8.2 Industry Demand Analysis” and “8.3 Capacity Analysis” in the "8 Situation Analysis" to learn more about demand and capacity.
