What are stock and incremental? For example, the stock is the cake that has been made, and the incremental is the cake that is about to be made or is being made. For the market, entering the stock market is how to divide the cake, and entering the incremental market is how to make the cake. Whether to choose products in the stock market or in the incremental market depends on one’s own advantages and disadvantages. If there is a clear advantage in product new technology, new design, new manufacturing or marketing resources, then entering the stock market will quickly gain some users, because there is no need to cultivate the market, as long as the product or marketing is better than the opponent, it can easily win. In the existing market, most products are in the stock market, and there are very few products looking for incremental markets.
There are two main reasons for the emergence of products in the incremental market.
One is that technological progress has led to the elimination of old products by new products, such as laptops replacing desktop computers and smartphones replacing keypad phones. This situation is actually an incremental product made in the stock market. Gordon Moore, one of the founders of Intel, proposed a theory: the number of transistors that can be accommodated on an integrated circuit will double approximately every two years, which is Moore’s Law.
Second, new demands have emerged in the market. Such products may explode in a short period of time and be accepted by the majority of consumers, but the demand will soon drop sharply. For example, the fidget spinner is a flat toy with a bearing in the middle and heavier objects on the edge to increase the rotational inertia.
The inventor of the fidget spinner is a woman named Catherine Hettinger from Florida, USA. One summer in the early 1990s, she was diagnosed with myasthenia gravis, but she also needed to take care of her 7-year-old daughter Sarah. Due to health reasons, she did not have much time to accompany Sarah, so she used simple materials such as small bearings to make a small top that she could carry with her and spin on her hand anytime and anywhere. In 1997, she applied for a patent and produced some toys in small batches for sale at exhibitions. But in 2005, she had to give up the patent because she had no money to renew the patent fee.
In early 2016, some players picked up the fidget spinner again and posted some related videos on YouTube, and more and more people began to pay attention to this product. Some experts and scholars believe that fidget spinners can effectively help people relieve stress. With one turn, people who focus on spinning can forget their worries for a short time. More importantly, it can help children with ADHD concentrate. This small toy spins fast and smoothly, making people fascinated by it. The sales of fidget spinners exploded in 2016. According to the Google Trends chart, we found that fidget spinners became popular in a short period of time, but sales fell sharply in 2017. This product is an opportunity product that has achieved a short-term market explosion in the incremental market.
The choice of stock market and incremental market has its own advantages, which depends on the seller’s grasp of its own characteristics. Companies or individuals with continuous R&D capabilities can enter from the stock market, which makes it easier to obtain orders; if they enter from the incremental market, the opportunity cost is relatively large, the initial investment is relatively large, the explosive growth is fast, the corresponding competition is relatively small, and there is a certain bonus period.