Takeoff is the trickiest stage. There are markets that never take off at all. Some companies spend years waiting for the snowballing affect to get started, and it never does. There are also markets that take off at odd moments, at times you would not normally expect, or after long periods of apparent smoldering. After takeoff, it’s too easy to forget that market growth rates will eventually approach saturation and decline. Some of the color television people projected increasing growth through the 1970s and were caught off guard when the market moved up to about 10-15 million units per year and then stopped. The video market drew a crowd of new entrants in 1982 and then virtually stopped growing.
The speed of a life cycle is also hard to predict. The video game industry boomed and faded like a typical fad. The home computer industry will probably last longer before saturating its market; then it will become a replacement market. Much depends on what the product does for its buyers and on who those buyers are. Sometimes the standard idea adaptation research will help. Mature markets are by far the easiest to forecast. These have slow growth rates and little change from year to year. In these markets, the old-fashioned forecasting methods – such as taking the average growth rate of the last five years and projecting it into the next five years – work reasonably well.
You can find an amazing wealth of market data on the Internet. The hard part, of course, is sorting through it all and knowing what to stress. As the Internet explosion increases, the hardest part about gathering market data is digesting all that’s available.