A comprehensive marketing development strategy can help companies determine potential areas for expansion. With this strategy, growing businesses can find new market segments for existing products or services and discover the most effective ways to increase revenue. It also helps build a broader image and increases brand popularity.
In this article, we will explain market development and how you can use it to grow your company. Then, we’ll look at the essential steps of creating a winning market development strategy.
Market Development Explained
The Ansoff Matrix, or Product and Market Expansion Grid, illustrates how a company can expand its total addressable market (TAM) across four categories: market penetration, market development, product development, and diversification. Instead of focusing on finding entirely new markets, market development allows a company to grow within its existing customer base.
The Ansoff Matrix or Product and Market Expansion Grid
A market development strategy is a part of growth marketing in which you aim to grow your business by reaching new markets. Simply put, it’s the process of introducing your current products and services to a new target audience or market — it’s the development of a new market for your business to enhance sales opportunities.
A market development strategy also benefits startups because they don’t have a target market. Since you don’t know about this new market, you’ll have to rely heavily on market research to analyze your current market and find new segments that you can approach based on demographics, customer needs, wants, interests, preferences, etc.
How to Create a Market Development Strategy
While each business may take a slightly different approach to creating a market development strategy that aligns with its industry, products, and goals, you can take some basic steps to get started. Below are the essential steps for creating an effective market development strategy:
1. Research your development opportunities
Before expanding into a new market or creating a new product, it’s essential to identify your most significant development opportunities. This can help you determine which opportunities may be the most successful and provide information to help you reach your goals. To begin researching your development opportunities, you can:
- Identify your target audience
- Analyze your market
- Conduct a survey on your current customers
2. Establish your growth goals
Consider which areas of your business you want to grow by introducing a new product or expanding into a new market. Some key areas you might focus on include:
- Sales
- Net profit
- Products
- Customers or users
- Geographic locations
- Employees
Then, develop a SMART goal for each area you want to focus on. For example, if you want to increase sales, your SMART goal might be to increase sales by 15% over the next six months. This way, you can identify clear and actionable goals to share with your team, key stakeholders, and company executives.
3. Allocate resources
Consider what essential resources you need to hit your growth goals. These resources can vary from industry to industry. However, the common resources required include raw materials, equipment, software, staff, marketing materials, and initial funding. Likewise, you can create a checklist or use a project management tool to keep things organized. After you’ve developed a list of the critical resources you need, you may begin to identify where you can get them.
Moreover, a backup option for each resource ensures that you are prepared to expand your product line or introduce your existing products to a new market.
4. Develop a marketing plan
Once you have allocated the necessary resources, work with your marketing team to develop a plan to launch your new product or introduce an existing product to new customers. Some marketing channels you may include in your market development strategy are:
- Email marketing
- Social media advertisements
- Digital content and blog posts
- Billboards
- Print and digital advertisements
- Television ads
- Local marketing
You can revisit your research about your target audience to determine which marketing channels they use the most. Work with your marketing team to establish KPIs for your campaign, such as the number of people reached or the number of clicks back to your website.
5. Launch your product
Once you have completed your research and planning, it’s time to launch your new product. To ensure success, openly communicate with your team about your goals, progress, and steps for action. Additionally, report regular status about the launch timeline, upcoming assignments, and deadlines to help your team stay on track.
6. Analyze results and improve your strategies regularly
After you’ve launched your new product or expanded into a new market, begin tracking your results to ensure you meet your goals and satisfy your customers.
Timely collection of information can help you assess how successful your launch is and estimate whether you can meet your projections. It can also help you identify areas for improvement and optimize your campaign. Lastly, use this data to present your findings to key stakeholders and executives within the company.
Tips on Creating a Market Development Strategy
Here are some tips to help you create an effective market development strategy:
Use clear communication
It is important to ensure that each team member understands your goals and what tasks they’re responsible for. Use simple language to share essential details and connect with team members for potential concerns.
Take note of important details
Make an effort to document the critical details of your market development strategy. This report may come in handy when you present your strategy to key stakeholders. More importantly, it provides a reference to revisit during each phase of your plan.
Invest in the right software and tools
Research different software applications and tools that can help you track the KPIs you selected to measure your business’ growth. Investing in the right software can improve communication, increase efficiency, and save time.
Be flexible
Challenges may occur when expanding to a new market or developing a new product. That said, you must review your market development strategy regularly. In addition, pay attention to your KPIs to identify whether specific components of your plan need to be adjusted.
Conclusion
A comprehensive market development strategy can benefit small businesses and startups looking to expand their market. With this guide, you’re ready to craft strategies based on your objectives and preferences. Likewise, you must consider the results of your research and case studies of successful businesses.
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