Captive Market

Definition:

A captive market is a group of consumers who have limited choice in terms of the products they can select/purchase (no choice)! This type of market was common during the production era when there was a limited supply of goods (and great demand). It occurs when the market is monopolistic, thus there is only one supplier in the marketplace. This is more likely to occur with digital products (Microsoft is a good example of this). It can occur when a marketer has achieved significant lock-in for its installed based. Thus the switching costs for the consumer to try a competing product become prohibitive.

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