Market development strategy – Definition and examples
Market development strategy Being an entrepreneur you have to deal with many challenges and make small decisions, and these small critical steps will determine the success of the organization. Like who to hire and when to share responsibility, may seem like small steps. But it will affect growth maximization, sales, and pricing models.
But when you have a product/service and you are ready to grow your business, you can use different strategies to grow and develop your business.
Igor Ansov mentioned four strategies for business growth.
- Market development strategy
- Product development strategy
- Diversification strategy
- Market penetration strategy
Today, we will discuss the market development strategy in detail with examples.
What is the market development strategy?
Market development strategy falls under the category of business growth strategy, and means introducing existing and new products into the new market. It helps companies in the period of growth to identify new opportunities and sell their existing products in the new unexplored market.
For example, a software house has designed a new software product. Now, you need to know the users of your products, so that you can target them by offering your product to them. This is how the market development strategy works.
The importance of market development:
A market development strategy helps companies and companies to approach new customers in a properly planned manner. When you expand your customer market, it brings a lot of new opportunities in terms of increased revenue, sales, and new leads. But it requires thorough market research that the new market will add some value.
Market development vs market penetration:
The focus of market penetration is selling existing product inventory to the existing market. On the other hand, the market development strategy focuses on targeting the new market and presenting the existing product to them.
Market penetration strategy and market development strategy are both less risky strategies. Both reduce risk factors for new product introduction as in diversification strategy and product development strategy.
When a particular market is going through a saturation phase, market penetration is the preferred strategy. However, when you reach the higher risk stage, market development is an appropriate strategy at this stage.
What should be considered in developing a market development strategy:
There are many things that must be considered before implementing a market development strategy, which is as follows;
- Is it worth investing in the new market and approaching new customers?
- Do you have a bandwidth tool or team that can measure the performance of your market development strategy?
- Do you have a specific target market that you haven’t entered yet?
- Will they take advantage of your offer?
- Should you launch a new product or modify an existing one?
Implementation of market development strategies:
The market development strategy will be different for different types of businesses. Therefore, you must implement this strategy in the way that best suits your business processes, product, and service.
New geographic markets:
If your product/service is small, expanding it to the new geographic global market will be the next step in your business. If you discover some emerging segments in the market, you should think carefully about these points;
Whether you can achieve any competitive advantage, whether the market has already gone through saturation,
Does the market have enough value to invest your resources in expanding market?
Will your product succeed in the new market?
Do you have enough resources and investments to enter the new market?
New demographic markets:
The new demographic market means studying and targeting a specific segment of the population. For example, you can select and target men or women. Cosmetics companies have been focusing on men for the past 20 years. Earlier they were targeting and focusing only on the female segment of the market.
Upselling to your existing customers:
You realize the various new uses of your products and then promote them among the customers of your existing market. Humans are very creative and curious to learn new ways of getting the job done.
If you think customers are using the product, you might be wrong. Therefore, you should survey and interview people about how some people use your product for what purpose. It will give you new ideas to market and promote your product.
Attract non-buyers in the current market:
Attract non-buyers to your existing market by offering new prices, accelerating marketing and promotions, and providing free trials. These market development strategies help you convince non-buyers in your current market to try your product.
Target your competitors’ customers:
It doesn’t matter in which category you run your business, there will always be competitors. However, you can attract your competitors’ customers by differentiating your products in terms of features, price range, or customer support. All of these technologies will make customers change their brands.
How is market development a two-way process?
The company must analyze different segments of the market and then you must finalize the segment that you want to target. The goal is to find out new interested customers in the current market.
After completing your target segment, you should develop a promotional strategy to attract new customers. The Economic Times says;
“The company may have to gain the support of both audio and video media to push the product deeper into the market.”
The marketing team must also adjust prices to achieve a marketing competitive advantage.
Examples of market development strategies:
Poached Jobs is an online recruitment platform, that provides reliable talented candidates to companies, companies, and managers. The platform follows the market development strategy. Whenever a company enters any new market, it owns the market by becoming the region’s staffing solution for hotels and restaurants.
Market development strategy – definition and examples
The staffing company started its journey from Seattle and Portland. Then it improved the platform and developed its marketing strategy and went to the bigger markets in Chicago and San Francisco. The company continued to experiment with new strategies with each new market. Poached entered the New York market in 2014. The company spent all of 2015 focusing on one market, and the focus was on achieving growth, success, and credibility, and then moving on to the next.
Poached Jobs’ market development strategy helped it stabilize its growth and focus on the existing market one by one.
Facebook started as a small platform for college students where they could share their selfies and see who is the most attractive. Today, we see Facebook as the largest social media platform in the world, and the platform continues to expand and enter new markets.
Facebook offers many pro features for free to keep users interested. As long as people stay on the platform, the company earns money by showing ads. The platform continues to grow with its current product.