Market acceptance has two connotations –
It is a measure by which it is seen whether the product or service is satisfying a large customer base so as to continue or increase its current production. Market acceptance is most important for a company to determine at the time of product launch to determine whether it is a failure or a success.
It also refers to a process in which market players adopt and accept (or otherwise) a new energy. Market acceptance here has a wider meaning, acceptance not only by the consumer but also by the investor and also intra-firm acceptance.
When speaking of market acceptance, two more terms need to be explained –
1) Initial market acceptance: set of addressed problems that at least one customer in your target market is willing to pay to solve.
2) Minimum market acceptance: set of solved problems that enough of your customers in your target market are willing to pay to solve, that determines “minimum success” for your product strategy.
Before releasing a product, most companies carry out a market acceptance test to see if their product will succeed when released in the market. One way to carry out market acceptance test is shadow testing. Shadow testing is when you let your product out before its release. You tell about your product and your value proposition to the prospective customers, and then open your product for pre-ordering. You don’t charge your customers for pre-orders until a certain date, eg. Release date of product. Based on the number of pre-orders you receive, you can estimate if your product will be accepted by the market or not.
Hence, this concludes the definition of Market Acceptance along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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