Tips & Guides — 06 Apr 2022
Guide to market development growth strategy
Building and running a successful business can be exciting yet challenging. Because of this, it can be easy to get comfortable – even complacent – when your business grows enough to get by.
However, settling and becoming satisfied with your lot can be more of a hindrance to your business than a benefit. Your competitors will constantly be developing their services and, if you don’t do the same, you could end up becoming obsolete.
There are many ways for entrepreneurs to grow their businesses and boost revenue. For example, you could take on more employees or equip your sales team with a more advanced sales engagement platform.
One of the most effective methods to grow revenue, which is often overlooked, is having a structurally sound market development strategy.
We’ve created this thorough guide to help you produce a strong market development approach that will allow your business to go from strength to strength.
In the wonderful world of business, nothing stays the same for long. Change is continuous, and the factors that govern your strategy may be different from one day to the next.
When we talk about market growth, we’re referring to one of two things: the share of the market you hold or the size of the market for your product or service.
To grow its position in a particular arena or expand the size of its market, your business might launch new products and/or upgrade existing products by adding new features.
This is done to help you stay relevant and up-to-date within your industry. Market growth may sometimes be forced upon a business to ensure it keeps up with its competitors and doesn’t fall behind the innovations and advances they’re making.
For example, consider the VoIP versus landline debate. If a phone line company refuses to acknowledge changes to business communication processes and react to market changes, it will lose customers.
Due to their advanced features, VoIP phone systems are quickly becoming a must-have across organizations. Landlines may soon be obsolete, therefore businesses that still offer them as a service are rapidly running out of clients.
A market development growth strategy refers to the way in which you choose to implement developments and achieve successful market expansion.
Igor Ansoff, who’s considered the father of strategic marketing, suggested there are four main strategies available to businesses looking to grow their market. These four strategies are defined using the Ansoff Matrix – a 2×2 matrix made up of market development, market penetration, product development, and diversification.
These strategies cover all bases, including new and existing products and new and existing markets.
If your business is content with its current products and their features, the most logical strategies to use are market development or market penetration.
Market development and market penetration are both incredibly useful growth strategies. However, one is often confused with the other.
It’s important to understand the difference between the two terms to ensure you’re following these strategies correctly.
Market development is the process of pursuing a new market in which to sell your products. On the other hand, a market penetration strategy is when a business attempts to sell its products to new customers within its current market.
Both of these strategies are very low risk as they don’t require the production or development of new products or services.
When it comes to market development strategies and growth marketing, you have plenty of options to choose from. However, some strategies may not be as effective as others.
Here are the four main market development strategies to help you expand your product/market successfully.
When starting a business, it’s usually smart to focus on a specific geographical group to secure return customers. However, when you’re looking to develop, a good place to begin is geographic expansion.
For example, if you’re currently running a business that only targets US-based customers, look into the possibility of expanding your customer base into other countries. Or, if your business focuses solely on customers living in Chicago, consider targeting the entire state of Illinois.
Do your research to determine whether this would be a good move for you.
Before jumping straight into trialing ways to secure new customers, focus on your existing ones. If there’s a pain point that affects most of your customers, you have the basis to pitch a new feature or product to them.
Use the trust your customers already have in you to introduce new ideas to them.
This can be a great option for recent start-ups and small businesses. If you don’t have the resources to invest in more complex business growth strategies, concentrating on current customers can bring just as many benefits.
If you’ve exhausted your options for upselling to current customers, it’s now time to think of those who’ve never used or heard of your product.
Develop a foolproof plan to sell your products to this new group of customers. This can be done by offering free trial periods, trusting the word-of-mouth system, or expanding your advertising.
You can also establish a social media campaign focused on attracting new potential customers or take steps to extend your reach using partnerships. Strategic planning and a strong promotional strategy will help massively.
It’s important to keep an eye on your competition so you can stay one step ahead of them. This also applies when you’re trying to expand your target market.
Pinpointing why you’re better than your competitors and what sets you apart from them is key to luring in their customers.
So, if you run the best Italian restaurant within a 20-mile radius or offer a better work communication system than any other business, make this clear. Consider offering competitive pricing and/or increasing your product distribution channels too.
Ensure potential customers know why they’d be better off giving their custom to your company.
Developing a comprehensive market development strategy is fundamental to successfully executing an extension plan. However, it can be difficult for business owners and their teams to construct an effective approach while hitting all the relevant points.
So, here is a five-step process to help you create your market development strategy.
Everybody wants to get in on the latest trends. So much so, that it can be tempting for businesses to make drastic decisions before assessing whether the investment is worthwhile.
Before making any major decisions or changing your product development strategy, it’s important to establish whether it’s worthwhile for your business to spend that amount of money, time, and/or resources.
There are a few ways you can do this.
Firstly, consider your target audience. Remember, customers are (or should be) at the center of everything you do. After all, without them, there’d be nobody to purchase your products or services.
So, spend time evaluating whether the expansion would help you provide a better service. If there are any chances this could be hindered, it may not be worth investing in at the moment.
It’s also important to review your buyer personas. When taking on development opportunities and expanding your business, you’ll also be expanding your target market. This means you may need to reconsider who’s buying from you.
Doing this will help you understand whether it makes sense to expand. Reflect on the demographics, backgrounds, and motivations of the new market your development strategy may attract.
It may also be worth calculating market penetration before agreeing on any expansion plans. It’s crucial to ensure your new features or products are needed within the industry and attractive to your target market.
Conducting customer surveys is a great way to determine whether existing customers are fond of your expansion ideas. If the results of the surveys show your customers won’t purchase anything new from you as it will not benefit them, it’s not worthwhile investing in a development strategy.
Remember, the customers are your boss – what they say goes.
Once you’ve established that your expansion plans will be welcomed by existing customers and have evaluated the new buyer personas they could attract, it’s time to set growth goals.
When implementing a successful market development strategy, this brings with it an increase in products, customers, sales, and profit, among other things. So, it’s important your business goals are developed in line with this growth to ensure you know what you’re aiming to get out of the expansion.
Your goals could be anything. For instance, are you looking to boost revenue by a certain percentage? Maybe you’d like to increase the number of employees within your business and open an office in another location.
Whatever your goals, consider what resources you’ll require. Perhaps you need to secure funding to open another workspace or invest in software that will expand your partnerships and boost business growth.
Finally, think about your ROI. Compare any upfront costs with the estimated profitability of your expansion plans. If your predicted ROI doesn’t show an expansion is worth it, you’ll have to start again.
A change or increase in your target market calls for an updated marketing plan too. For example, an eCommerce brand will need to upgrade its digital marketing plan to ensure its development is successful.
To create demand within a new market or boost existing demand in your current market, it’s essential your marketing plan reflects the strategies required to help you meet your goals. For instance, do you need to invest in an email marketing strategy? This may be worth looking into if you want to alert existing customers to your new plans in a quick and efficient way.
You could also consider developing your content and SEO marketing strategies to draw in new prospective customers. This is a useful approach that can be successfully applied by any company with an online platform, like a website or blog. Having strong content and SEO will attract more visitors with an interest in your product or service and give you a competitive advantage.
Additionally, establishing partnerships with other businesses and/or influencers in your industry will bring a substantial customer base to your company. This could introduce your brand to completely new market segments. You might want to invest in a high-quality partnership marketing platform to help you make the most of partner relations.
Finally, if you’re looking to develop your target market on a regional level (for example, within five miles) local marketing may be of interest. Working in collaboration with regional publications or advertising agencies will help to attract lots of local potential customers.
Whatever strategies you choose, ensure your marketing plan is clear and consistent.
Now the market research and planning stages have been finalized, it’s time to go to market, whether that means officially opening a workspace in a new location or putting your new product up for sale.
However, there are a few more steps that need to be taken first to ensure you and your team are in the best possible position for launch.
Firstly, a clear campaign plan should be drafted so all team members are aware of the strategic actions needed for the launch to go smoothly. It should also confirm the main purpose of the development project so members are fully informed.
Additionally, a sales plan should be constructed to help your sales team understand the specific details of the development. For instance, overall projections and sales goals should be included in this.
Finally, keeping on top of your team email updates will be crucial to ensure everyone is informed at each stage of the development process. Implementing a strong emailing system will make certain all team members know the timeline of the launch, understand their tasks, and stay on top of their schedule.
Following these steps will avoid any confusion leading up to the launch and ensure it goes as smoothly as possible.
After taking the necessary steps to grow your market development strategy, it’s time for the real work to begin.
Analyzing the results is crucial to know whether it was worth it. You need to establish whether customers are completely satisfied with your expansion and identify issues that may need to be resolved.
This is done by collecting and analyzing sales data to gauge whether your predicted goals are being met. If not, you may have to improve your strategy or adjust these to ensure your plan is successful.
It may be useful for you to adopt business intelligence tools and practices. Not only can this reduce analysis time, but it can identify market trends through predictive analytics, thus increasing your competitive advantage.
Once your analysis of the data is complete, be sure to present the results to your team and stakeholders in a clear, concise manner. This will allow them to better understand and support your development plan moving forward.
The best technique for implementing a market development strategy will vary across companies and industries. Each business should choose a method that best suits its needs, operations, and product type.
The following options are just two of the main methods of implementing a successful market development strategy.
One way to develop your market is to find new uses for existing products. Doing this will allow you to advertise to fresh prospects who may not have been interested in the past. For example, a phone production company that adds a high-quality camera to its products will be able to target more customers than before the camera feature was added.
You can delegate the task of discovering new features to your team. Several brains are better than one, and everyone is different when it comes to creativity. Asking others for new ideas is a great way to find uses for your products that may not otherwise be thought of.
It may also be worth considering working with a digital agency that can help you create the most effective advertisements to promote new product angles to your target market.
If you launched your product by focusing on a small area, a good way to enlarge your market is by expanding into new regions or international areas. However, before you make this decision, it’s important to consider whether your business can honor orders to different locations.
Firstly, determine whether you have the resources to expand geographically. If not, do you have the funds to increase your resources? For instance, if expanding geographically requires the opening of another workplace, are you able to afford that?
Additionally, it’s crucial to consider the level of demand for your product within a new market. If your competitors have beaten you by expanding into other areas first, are you able to convince customers your product is better?
Ask yourself these questions, and carry out in-depth research to ensure your business is ready for this kind of change.
Creating and implementing a strong market development strategy is fundamental to successfully expand your business.
It’s clear the best strategies for market growth depend on the business and industry. However, no matter which method you choose, it’s important to carry out thorough research before making any changes to ensure you’re ready.
So, before developing plans to expand your business at an international level or advertising new uses for an existing product, make sure all your bases are covered. Consider integrating different platforms and useful tools into your systems. For instance, you could use a data transfer platform such as CPAPI to improve your partnership programs.
Remember, customers are the heart and soul of your business. Make sure you’ll be in high demand if you opt for a new location, and research what kind of features new customers will like. Think of them (and your finances) before jumping into the unknown.
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