As a business owner, there are likely some days you’re tugging your hair out while racking your brain for strategies to expand your business. Has it come time to create a new product, or can revamps still be made with the existing one? How about leveraging your current product to reach new customers?
Today, we’ll be lending a subject from the father of strategic management, Igor Ansoff, who claimed that only four primary strategies are available for business growth. One of them is known as market development strategy.
What is a market development strategy?
Market development strategy involves extending your line of products to previously unexplored markets. If your company is happy with your current product or service, this would be the next logical strategy to implement for broadening your customer base.
Not to be confused with market penetration, which involves targeting new customers in your existing market, market development seeks to sell into untapped markets. This business growth strategy mitigates the high risk that comes with devising and selling a new product.
A few factors to consider before executing a market development strategy:
- Is there a specific market that you’re not serving but could benefit from your offering?
- Is the market attractive?
In this case, some market research should be carried out. You can conduct a segmentation analysis of your current market, then shortlist the market segments you wish to reach with your product.
- Do you have the resources to pursue this new market?
- Will your business be able to adapt to the latest market?
- Can your business preserve its competitive advantage and emerge victorious in the new market?
Examples of market development strategies
There are several methods to execute a market development strategy, varying for different businesses. Having decided to stir your company in this direction, you should choose a tactic that best suits the type of products and services your organisation provides.
1. Geographical expansion
Let’s say your firm started small, but now it’s time to expand into other national or even international regions. Geographical expansion is an ideal strategy for those in the service industry looking to expand their service territory since they need physical locations to serve consumers. For example, OldTown White Coffee originated here in Malaysia, but their tasty beverages have since been exported to foreign counties like Singapore, Thailand, Taiwan, China, USA, New Zealand and more.
2. Upselling to present customers
Foster your relationship with present customers who could benefit from your new offering. You can do this by finding and advertising new uses for your product or dangling incentives for increased usage.
3. Attract non-users
While upselling to your existing customers, you can also cultivate ways to target non-users of your product or service. This process can be achieved through various methods, such as offering free trial periods, adjusting your pricing both ways, advertising and promoting other uses for your product.
4. Attract customers from competitors
Nothing like a little healthy competition—or stealing customers away. You can try attracting your competitors’ customers by distinguishing your brand from the rest, offer discounts or incentives, increase advertising efforts and deliver a better user experience.
How does digitalisation help?
In this digitalised age, companies that don’t acclimate to technological advancement tend to have the lower hand. It’s no secret that digital channels are vital for amassing and retaining customers. Digitalisation has doubled the options for business growth, and with each traditional strategy, there’s now a digital alternative.
1. New options for growth
This progressive tier of strategies complements the conventional approaches and makes them more actionable: How can I use digital to strive for new geographical markets? How can I use digital to form new segments in my current geographical market?
2. More attainable for smaller companies
Implementing digitally-enabled strategies is much more feasible for small and medium-sized enterprises, as it demands less money, time and risk. Market development strategies will be placed within their financial reach, tolerance for risk, and time horizons.
3. Benefits all growth tactics
A successful digital-enabled strategy can stimulate growth not only in one aspect but across all others such as market penetration, product development and of course, market development. For example, being able to target new geographic areas outside of the country online, where a physical presence is deficient. Simultaneously, you can attract new customers in your current market with your growing digital network.
4. Modernised demands
As mentioned, firms that embrace the modernisation of technology and digitally-based growth plans are rapidly rising to the occasion. Smaller companies are finding it easier to expand their business today compared to ten years ago. Many senior executives have found themselves defeated in this department.
The catch is that you need to master digital proficiency, or at least know enough to implement these strategies. What was once optional is now becoming a critical skill to acquire to compete and grow.
Digitalisation is the exact nourishment a market development strategy needs to emerge triumphantly. Anyone familiar with small startups selling for millions can tell you that. The digital revolution has dislodged barriers for growth and hatched new opportunities within the grasp of medium-sized businesses. It’s up to those who are digitally proficient or compliant to change to reap the fruitful benefits.
You don’t necessarily have to fret if you’re not the tech-savvy type. If you’re looking for ways to enhance business growth and break into the digital world, a captivating company profile can be your dearest friend. Having a prominent online presence might just be what you need to lure customers away from your competitors.
Walk Production offers superb services that help magnify your brand awareness, whether it’s creating a company website, writing blogs, copywriting, corporate identity design — our digital agency does it all! We provide the right aid you could use to execute successful digital-enabled market development strategies. Find out more about Walk Production’s services here.