In order to grow your business, you have to think of market development. Market development strategies are themselves the strategies that are similar to growth strategies. Whether you want to target a new audience or launch a new product or open a store to a new location, you need to develop some digital marketing strategy for that.
As a beginner, you need to take a lot of responsibility and understand the basic concept of market development. I know there are several questions that are juggling in your head, like,
1. What is market development?
2. What are market development strategies?
3. What are the advantages of market development?
4. What are the disadvantages of market development?
5. What are the principles of market development?
Here I will give you answers to all these questions.
What Is Market Development?
You can consider market developments as a strategic step, which is taken by a company or brand in order to develop the existing market rather than forming or searching for a new market. Here, the company searches for new buyers for pitching its product to a totally different segment of customers in an effort to increase sales.
The market development process generally consists of two steps to tap the untapped market. And they are
- Market research.
- Pricing of the products.
What Are Market Development Strategies?
While considering market development strategies, you need to look after several factors, and they are
- Do you have any specific target market you are not serving yet? Will your product truly benefit the market or audiences?
- Does your team have the bandwidth to develop and measure the effectiveness of any market development strategy?
- Is the effort that you are going to put in this market worth the investment that your company is going to put? What is the ROI?
Here are some market development strategies.
1. Upselling to Current Customers
While you are thinking of a new product offering, check if some or all of your existing customer base will be benefited from your product. If yes, then use your relationship with your current customers as a gateway for introducing the new product.
2. Attracting Non-users
Apart from selling your new product to your current customer, you also can try to attract the non-users of your products. You can target them through various methods. From offering free trials to cold outreach or simply advertising your products to them, you can consider any of these or all of these.
3. Geographical Expansion
Another way to reach new customers with your product is by expanding geographically. Let’s take an example. If you are currently serving the people of the United States, then you can do thorough research to reach customers across the globe. If you are currently offering only to the tech companies of San Francisco, then do research on whether you can serve the tech companies of New York or not.
4. Attracting Competitor’s Customers
When you are in the market, you will also have some competitors. The ones who are making products like yours and serving the customers that are also on your target list. You can convince those customers to use your products by adjusting the pricing or by offering some discounts or incentives. You also can consider lookalike audiences in advertising or try to deliver a greater user experience.
What Are The Advantages And Disadvantages Of Market Development?
Everything has both positive and negative sides. So does the market development strategy. Market development has both positive and negative sides as well. Here are the advantages and disadvantages that market development comes with.
At the time of developing market development strategies, companies often consider multiple market segments. The first targeted segment is advertising, which makes you feel provided with the potential for profitability. Till the time you have other potential markets, you can consider market development as a part of your growth.
This is more appropriate in this case. The competitors have not targeted the potential market yet. You can plan to add a store to those geographical locations, where you will have little or simply no competition.
The major risk that market development has is the loss of capital. When you are thinking of expanding the market or building new locations, you need to invest capital. And in case the new opportunities do not pay off. The company will lose the invested capital along with resources that can be invested in other strategies.
When a company is spending itself, there is a chance that it will struggle to satisfy its existing customers. As it also needs to put some extra effort into the expanded market, it may not be able to complete the requirements of its existing customers in a timely manner.
What Are The Principles In Market Development?
Whenever you are building a new strategy, you need to make sure that you are doing it by following the principles. Here are some basic principles that you can consider for market development.
- Most of the companies think about the business more, like who the customers are, what the business is, and why do people like them. But in actuality, it should be like what the business needs to become. So, focus on this from the next time you’re planning development strategies.
- It also has been seen that most mid or small-sized businesses consider the traditional mass marketing tactics and strategies. If your marketing plan includes the creation of “top-of-mind-awareness,” it is obviously good. But you also require a huge amount of capital. So it will be best if you use “micro marketing” in place of that.
- The entire process that you will conduct is to increase sales. So, keep that in mind while making the market development strategies. The traditional marketing development compresses the margins. The best is not to consider them here.
- 98% of the people who actively work on market development see the world through the eyes of the company or retailer. But in actuality, they should consider the perspective of the customers’ point of view. Do not make the same mistake again.
Market development is directly related to the growth of your company. If it is done properly, it can effectively increase your sales, which is the primary intention behind this. But make sure when you are trying something new, there will always be some potential risks. So, calculating the risk factors is also important here. After all, you will never want to lose your returns while experimenting with something new.
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