First Step In Marketing Strategy – Your business is doing well, but questions remain. Can I sell more? Are there opportunities to increase your market share? Is there a way to strengthen your product differentiation efforts? Companies looking to increase revenue can achieve this in a variety of ways, including increasing their marketing budget, expanding their sales force, and investing heavily in product development. However, an often overlooked way to increase gross sales is a well-targeted, well-researched and executed market development plan. In this article, we explain what marketplace development is and how you can use it to increase your sales and grow your business. Then we’ll look at some examples of market development strategies that work in today’s top companies. What is market development? Market development refers to the expansion of the Total Combined Market (TAM) and reported market share. The Ansoff Matrix (or Product/Market Expansion Grid) shows how a company can measure its TAM in four categories: market entry, market development, product development, and diversification. Each category is guided by two axes, one marketing and one risk. A company can expand its efforts into new or existing markets, each of which carries a level of risk to the company. Market Entry When a company wants to expand into an existing low-risk market, it can try a market entry strategy. In this case, the TAM increases because the business can actually increase the maximum revenue it can earn from its existing customer base by offering a new product or service. Product launch is an effective way to implement this strategy. Product Launch: A company may launch a new iteration of a product that it is already selling successfully in the market. The goal of a new product launch is to generate buzz and buzz about the brand, thus increasing sales. Product Development A risky way to expand within the existing market is product development, but don’t screw it up. This market development strategy can be rewarding. New product development is a delicate process. Market interest is what drives product development, so companies need to understand the market. This strategy can be difficult to implement if your audience is not receptive due to a lack of education about your product, a poor marketing campaign to promote your product, or a poor product launch. However, companies that fail to develop new products often have deep learning to apply to their next marketing development strategy. Product development takes many forms, here are some examples: Rebranding – If your company has been around for a long time or is just in hot water, chances are the market has stopped connecting with your brand. This may be due to a lack of marketing for the brand itself, an outdated position of the product relative to the competition, or a lack of trust in the market. Companies can reconnect with their existing markets by positioning themselves as a viable alternative to the competition. Adapting product packaging, offering a new size, taste or color, or even changing the product name or branding can help a company rebrand the product to better position it in the existing market. Pricing – Another way to gain traction within an existing market is for a company to make its product more affordable or desirable in that market through pricing. Pricing is one way to create a product development strategy, but that doesn’t mean lowering prices. It may mean rebranding within the market to reflect value or luxury, thus justifying price increases to capture these customers. Market Development When expanding into new markets, you can take a risk-free approach. To develop the market, companies can reduce some risks. In this example, the TAM increases because the company can add more people to the target market to serve new customers without investing in new product lines. Here are some ways companies can develop new markets. Geographic expansion: Research can reveal the best markets for your business to succeed based on where it currently operates. Geographic expansion is appropriate for both offline and online businesses. Franchising – Giving sole proprietorships the right to use brands and trademarks associated with their business is another way to expand into new markets without too much risk. In a franchise agreement, the franchisor pays an upfront commission to the franchisee. Diversification Sometimes a company can deviate from its normal operations and markets to create products for entirely different industries and markets. For this reason, divestment can be a big risk for a business, but can be very rewarding if done successfully. Diversifying similar products – A business may find it can reuse the raw materials or by-products of a product it sells into entirely new products it can sell to customers other than those it currently buys. Unique Product Differentiation – Instead of using an existing product, a business can take a unique approach to entering a new market by offering a product or service that is different from those offered in the industry. How to develop a market development plan Explore your development opportunities. Set growth goals. Create a marketing plan. go to market Analyze your results. Decisions about when and how to develop existing markets should be a systematic process. Just because your business was once successful doesn’t guarantee the success of your new expansion plans. For this reason, follow these steps and use these tools to determine if and how you should develop your market and if your initiative will be successful. Phase 1: Research development opportunities. Whether that means adding focus areas to your consulting business or adding more items to your restaurant menu, it’s always tempting to follow the hottest trend. But before you spend time, money, or resources developing a market based on a certain method, follow the steps below to determine if it’s worth expanding. Buyer Research Ultimate Buyer Persona Tool: HubSpot Buyer Persona Template Download This Template As you expand your market, you may need new or converted buyer personas who are true representatives of your ideal buyer based on market research and real-world data. your existing customers. Consider the motivations, demographics, and background of your new target market to determine if your development strategy makes sense. Best Market Research Tools: HubSpot Market Research Kit Download This Kit Before you go into the market, it’s important to understand where you stand in the market. To do this, market research work such as Porter’s five forces analysis or SWOT analysis is done to determine the strengths, weaknesses, purchasing power, threats of incumbents or other characteristics compared to competitors in this new market. You need to calculate your market penetration before proceeding with your expansion plans. The Ultimate Customer Evaluation Tool: Customer Satisfaction Survey Template Download this template If you’re looking to expand your current product line to generate more revenue from your existing customers, make sure your targeted expansion is well received. Asking yourself why it makes sense for this development to come from your organization is a good first step. However, talking to and testing your customers to see if the proposed extension is right for their lives (and more importantly, whether or not they will buy from you) is the proof you need before expanding your product into a business. . Step 2: Set growth goals. Successful market development results in additional sales, revenue, employees, customers, products, users, locations, or any combination of these criteria. Because there are so many factors involved, beyond growth goals for each criterion, develop goals for the area of business you want to grow. For example, by adding another site, you can set the following growth goal: 90% increase in customers. 100% increase in sales. Double profit every year after the first payment. Increase headcount by 20. At this stage, you should consider what you need to achieve your growth goals, such as seed funding, equipment, and software that will help you get started and make your move successful. Finally, the most important metric to measure before expanding or developing a market is ROI. In this phase of the process, the initial costs for developing the market as planned are compared with the estimated revenue figures for a successful expansion. If ROI isn’t enough motivation to keep going, take a step back and decide on a new growth strategy.
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