Market overhang

Market overhang

Market overhang is a term derived from the physical world meaning things that stick out or hang over another thing. Often from the viewpoint of standing beneath an 'overhang' there is shade provided by a protrusion from the adjacent vertical domain, such as a tree or building.

In marketing, overhanging the market relates to the business practice of announcing a new product or a new business strategy by a company in an adjacent space to the target. To be an overhang in this context, the following conditions must exist: the announcer is a market leader in the adjacent space; the new product is not ready for release at the time of the announcement; the market is new and standards are not yet clearly defined; and, the goal is to forestall competitor growth by encouraging customers to wait for the new product.

Recent examples of overhang

In June 1999 - Nortel declared a voice over IP strategy, while Cisco and its newly acquired Selcius Systems IP PBX were starting to gain traction. See mobile VoIP blog and history, and Inca strategy. Nortel was a leader in enterprise PBXs and made this announcement to retain the loyalty of their enormous installed base and to slow down the adoption of the IP PBX product category. Nortel overhung the IP PBX market, announcing products 12 months or more before their availability.

In June 2006 - Microsoft enters the IP Telephony market with PowerPoints. Here the collection of products and related applications in adjacent markets combined with announcements of as-yet-not-available products, attempt to overhang the IP PBX market, slowing down the growth of the market, forcing the players to consider the implications and adjust, encouraging customers to think about what Microsoft can bring to the market, giving Microsoft engineering the time to catch up with product. see Microsoft overhangs the IP PBX market

Effectiveness of Market Overhang

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


Wikimedia Foundation. 2010.

Игры ⚽ Нужен реферат?

Look at other dictionaries:

  • Market Overhang — An observational theory stating that in certain stocks at certain times, there is a buildup of selling pressure. This occurs as a combined result of sales and a strong wish to sell among those who still hold the stock but fear that selling it may …   Investment dictionary

  • Market overhang — The theory that in certain situations, institutions wish to sell their shares but postpone the share sales because large orders under current market conditions would drive down the share price and that the consequent threat of securities sales… …   Financial and business terms

  • market overhang — The theory that, in certain situations, institutions wish to sell their shares but postpone the sale because large orders under current market conditions would drive down the share price and that the consequent threat of securities sales will… …   Financial and business terms

  • market overhang — The situation in which sellers, worried by falling prices, prefer to postpone their sales until there is greater market demand. By reducing transactions, this behaviour can itself delay the hoped for recovery …   Big dictionary of business and management

  • Overhang — may refer to: Debt overhang, a fiscal situation of a government Market overhang, a concept in marketing Monetary overhang, a phenomenon where people have money holdings due to the lack of ability to spend them Overhang seat, a constituency seat… …   Wikipedia

  • overhang — Used in the context of general equities. Sizable block of securities or commodities ( commodity) contracts that, if released on the market, would put downward pressure on prices ; prohibits buying activity that would otherwise translate into… …   Financial and business terms

  • overhang — noun a large quantity of shares or of a commodity or of unsold stock available for sale, which has the effect of depressing the market price ■ verb ♦ to overhang the market to be available for sale, and so depress the share price …   Dictionary of banking and finance

  • overhang —  A large quantity of stock that is available in the market.  ► “Risks to Lucent’s share price include CUTTHROAT COMPETITION, a huge overhang of 524 million shares that AT&T plans to offer at year end, and doubts about whether Lucent will actually …   American business jargon

  • Debt overhang — is when an organization (for example, a business, government, or family) has existing debt so great that it cannot easily borrow more money, even when that new borrowing is actually a good investment that would more than pay for itself. This… …   Wikipedia

  • Advertising — This article is about the form of communication. For other uses, see Advertiser (disambiguation). Advert redirects here. For the band featuring musician Gaye Advert, see The Adverts. For content guidelines on the use of advertising in Wikipedia… …   Wikipedia

Share the article and excerpts

Direct link
… Do a right-click on the link above
and select “Copy Link”