Market overhang

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The market surplus is derived from the physical world term that refers to things that extend beyond another thing or hanging over her. When standing under an "overhang" there is often shadow from a protrusion from the adjacent vertical area, such as a tree or building.

In marketing , the term "overhang" refers to the business practice of announcing a new product or business strategy of a company in an adjoining space to the goal. To be an overhang in this context, the following conditions must be met: the advertiser is a leader in the adjacent space; the new product is not yet ready for market launch at the time of announcement ; the market is new and the standards are not yet clearly defined; and the goal is to prevent the growth of competition by encouraging customers to wait for the new product.

Examples of overhang

June 1999, Nortel announced a Voice over IP strategy, while Cisco and its newly acquired Selcius Systems VoIP IP phone system began to gain traction. Nortel was a leader in enterprise phone systems and made this announcement to increase the loyalty of its basic customers and slow down the adoption of the IP PBX product category. Nortel overtook the IP PBX market, announcing products 12 months or more before they were available.

June 2006, Microsoft enters the IP telephony market with PowerPoint . Here the company seeks the collection of products and related applications in adjacent markets, combined with announcements of previously unavailable products, to tower over the IP telephony market, slow the growth of the market, forcing players to rethink the impact and adapt to encourage customers to think about what Microsoft can bring to market and to give de Microsoft developers the time to submit the product.

Effectiveness of the market overhang

The empirical evidence suggests that this technique is effective as it continues to be used as a marketing tactic by large companies that are slower to respond to the high growth of adjacent markets that are developing rapidly. As the high technology industry continues to consolidate, the market overhang is likely to persist as a mechanism for marketers to "shape" emerging segments.

Individual evidence

1. ↑ mobile VoIP blog and history . In: brockmann.com .  ( Page no longer available )
2. ↑ HugeDomains.com - VoipLoop.com is for sale (Voip Loop) . In: voiploop.com .