Growth Focused Market Development Strategy in Business

Market development refers to a strategic step taken by a company to develop its existing market. Even if the market is pre-existing, when a company takes the initiative of developing the market of its product, it focuses on pitching its product to a new set of customers considerably from a different segment. Let’s take a deeper dive into it,

What Is Market Development?

The process of market development is segmented into 2 steps. Depending on the market development strategy, the first step of development comes with the research. With research being targeted at segmentation analysis. With this analysis companies find out about the different segmentation of the market which is worth pursuing their product or services.

It is a way of finding out a new customer base and segment of the existing product. A buying group or segment is defined by a small group of people taken as a sample.

For example, the marketing team can take this sample depending on different geographic locations, different income levels, etc. Once the company finds out which segment to pursue they can involve their next step accordingly.

Then, in the next step, the company involves its promotional strategy. To do that, companies may need to leverage different mediums of communication using different platforms. Traditionally companies with a bigger budget practice bigger strategies.

The Second step engages the pricing of the product as part of the market development strategy. In a competitive market, it is an undeniable truth that you will need to compete against similar products in terms of price. But the pricing can also differ if the product varies in features, qualities, etc. But if the products are similar mostly, then the pricing needs to be competitive too.

The marketing team can identify that and find out the point of penetration where the pricing can be set aggressively below the competitor’s price. That can result in an increase in market share as long as the competitor doesn’t counter it with their own strategies.

Even if this process sounds fascinating and sounds like a must-try, the companies need to invest heavily in developing such operations. & if after all of this, the segment doesn’t pay off, the whole operation turns out worthless.

Market Strategy Development

If your company is happy with the existing product, then it’s a no-brainer to develop a new product again for a new segment. In this case, developing the market helps by involving a new segment of the customer base. A simple process of broadening your customer base for the selected product can bring success for the foreseeable future until the development of a new product is needed again.

Not to be confused with market penetration, while penetration helps with targeting new customers in the existing market, market development seeks to sell the product or service to an untapped new market. This business growth strategy helps by mitigating the risk of devising and selling a new product. But some key points to be considered before executing this development strategy.

• Identifying if there is a market that you are not serving but can serve with profitability ensued.
• Is the market attractive in the long run?

To identify the arising questions, market research needs to be carried out.

With the segmentation analysis, further initiatives can be deployed. Some of the key points that need to be analyzed are:

1. If you have enough resources to pursue this new market.
2. Will the business be able to adapt to the latest market?
3. Can the business preserve its competitive advantage & emerge victorious in the new market.

Some Ways Of Market Strategy Development

Market development strategies can vary from product to product, and business to business. You need to adapt to the ways best suited for your business. Let’s have a look at some of the options that can be pursued for your business. They are:

1. Geographical Expansion
2. Upselling To Present Customers
3. Attract Non-users
4. Attract Customers Of Competitors

Geographical Expansion:

Let’s say, your business has started on a small scale. After the first stage of success, the next step for your business can be expanding nationwide, even on international boundaries. Geographical expansion as per market research is an ideal strategy for service businesses since it can open new options for international buyers. & in this day of digitalization geo expansion is the way to develop the market for new and established companies.

For example, Walton is a local tech company that started in the national boundaries first. At their first phase of market development, they went nationwide, recently they have started exporting their products internationally after developing their market in foreign boundaries.

Upselling To Present Customers:

By fostering your relationship with existing customers about how they can be benefited from your existing customers you can upsell to them. Identifying the new usage or benefits of your current products can lead them to buy from you again.

For example, during the pandemic, the market for disinfectant spray became bigger. By leveraging newer innovative usage companies did upsell their products to existing buyers and that’s how they have developed their marker during the time of need.

Attract Non-users:

While upselling to your existing users, you can also find newer ways to attract non-users as well. To attract non-users you can formulate newer strategies such as putting your products for trial also lower the price point. By adopting such changes added with marketing efficiently, you can grab nonusers’ attraction as well.

Attract Customers Of Competitors:

Healthy competition in the relevant industry is always welcome, also stealing competitor’s customers in a healthy way.

You can differentiate your brand from your competitors by telling the competitor’s customers about your quality assurance, enhanced quality, and customer satisfaction rate. Also by investing in your advertising budget you can attract them and make them your loyal customer base by assuring quality in the long run.

Importance Of Market Development

To identify, nurture & acquire new customers market development is a very important aspect for any business. With this process businesses gain new traction and new profitability options. Nevertheless, the importance of developing the market is subject to the business owners’ attention. Some of the important aspects of development can be seen as,

1. Added profitability to the business.
2. Greater reach among customers about other products.
3. Brand recognition to a new segment of customers.
4. Success can bring in the opportunity to develop new products according to need.
5. Creating greater competition in the consumer market.

Market Development vs Product Development:

Product and market development are two quadrants of Ansoff’s growth matrix. The key difference between product and market development is, product development is a strategy of bringing in a new product to the existing market, whereas market development concentrates on the development of a new market or segment of customers for the existing product.

An example of product development can be identified in Coca-Cola. Coca-Cola invests heavily in product development to introduce newer flavors of the product to the market. With the diversified product, they can attract new users, non-users even competitors users.

On the other hand, an example of market development can be seen in Starbucks. With their geographical expansion strategy, they have developed new markets in various regions. It helped their cause of market development by creating attention to the different region users. Those who didn’t get the opportunity to consume their product can now consume their product with the availability.

How To Develop a Market Development Strategy Step-by-step?

To develop an effective market development strategy a step-by-step execution strategy needs to be implemented. Here are some of the key step-by-step guides to a successful market development strategy.

1. Research
2. Growth Goals
3. Resource Allocation
4. Marketing Plan Development
5. Product Launch
6. Result Analysis

Research: First and arguably the most important part of market development strategy is research. It is the backbone of development. It is crucial to conduct market research before implementing any market development strategy and research needs to be continued over time & start collecting sales data.

Growth Goals: To get the most out of market development companies must ensure that they have achieved their growth goals over the time period.

Resource Allocation: As per the market development strategy resources needs to be allocated accordingly.

Marketing Plan Development: According to the market needs effective and efficient market development strategy needs to be implemented.

Product Launch: To achieve the most profitable goals market players need to launch new products and develop a market strategy in a continuous manner.

Result Analysis: After a market based plan has been launched and implemented, the result from analysis is a key point of taking proper decisions. Result analysis gives a competitive advantage behind decisions for the long run.

To summarize it all, market strategy development for business is an unavoidable operation to stay competitive and surpass the competitors in the market. With newer development and optimization a market for a product can grow over time, which can bring in the ultimate business success. Depending on various agencies can make this colossal task much easier for you. With the expertise of such agencies, an effective result can be delivered if the step-by-step plan is executed right.

Frequently Asked Questions (FAQ):

Why market development is important?

Market development is important for many key aspects. Some of them are,

• Added profitability to the business.
• Greater reach among customers about other products.
• Brand recognition to a new segment of customers.
• Success can bring in the opportunity to develop new products according to need.
• Creating greater competition in the consumer market.

What Are The Risks of Market Development?

Market development is also a risky approach because of the involvement of finance in it. When a company tries to expand their market, they need to approach different markets with different strategies. Although a lot of research goes into this process there is always a slight chance of not getting the proper outcome from it. Which can result in the loss of valuable resources. That is the reason why market development can be risky.

When does a company implement a market development strategy?

Traditionally a company implements its market development strategies in order to get new customers or add profit into its existing products account. Also, if a company wants to expand to different geo-location in order to create a bigger impression, market development strategy can be the key behind it.

What is the difference between Market Development & Product Development?

The key difference between market & product development is, product development concentrates on a new product for the existing markets while market development involves different segments of the market for existing products.