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Aftermarket (also after-market) refers to any market where the customers who purchase one product or service are likely to purchase a related, follow-on product The concept of a secondary market for merchandise, is related, but not the same. Where an aftermarket refers to a potential follow-on product sale, a secondary market refers to an availability of products due to their re-sale by the end customer.
The existence of an after-market is often a persuasive argument for manufacturers to stay in direct contact with end users. Manufacturers will use postage-paid guarantee cards, for example, to keep track of the address of end-users.
In many industries--automotive, consumer electronics, home appliances--the after-sales servicemarket has ballooned to four to five times the size of the original equipment business.—Harvard Business Review, 2006
Success of the razor and blades business model relies entirely on profits from aftermarket merchandise.
- Customers who install a software package will constitute the aftermarket for software support services.
- Buyers of single-lens reflex cameras are an aftermarket for lenses and flashes.
Notes and references
- Cohen, Morris A., Narendra Agrawal, and Vipul Agrawal. "Winning in the aftermarket." Harvard business review 84.5 (2006): 129. See also: https://hbr.org/2006/05/winning-in-the-aftermarket
- "Top 10 Things Your CEO Should Know About Service", MCA Solutions, p.3.
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