Market dynamics refer to the forces that impact supply and demand within a market, influencing prices and the availability of goods and services. Market saturation is a key factor within these dynamics. When a market becomes saturated, the balance between supply and demand shifts, often leading to increased competition and price wars. Companies must closely monitor these dynamics to adapt their strategies effectively.

Competitive saturation occurs when numerous companies offer similar products or services in a market, intensifying competition. This is closely related to market saturation, as high levels of competition can accelerate the saturation process. Market share, the percentage of total sales a company holds within a market, becomes a crucial metric in saturated markets. Businesses strive to maintain or grow their market share through product differentiation and targeted marketing strategies.

When facing market saturation, companies often look to market expansion strategies to sustain growth. This can involve entering new geographic markets, diversifying product lines, or targeting new customer segments. Understanding market penetration, the extent to which a product is recognized and bought by customers in a particular market, is essential for effective expansion.

Distribution strategy is vital in saturated markets, as it determines how products reach customers. Access to distribution channels can significantly influence a company's ability to compete. Effective distribution strategies can provide a competitive edge, particularly in saturated markets where convenience and availability can drive customer decisions.

In saturated markets, the cost of acquiring new customers, or Customer Acquisition Cost (CAC), tends to rise due to increased competition. Companies must carefully manage CAC to ensure profitability. Strategies such as improving customer retention, enhancing product offerings, and optimizing marketing efforts can help manage these costs and sustain business growth.