How to Choose a Market Development Strategy

September 14, 2009 by Ed Adkins

You can grow by leveraging your product knowledge to reach new customers.  More than likely, you have spent time and money developing your product and service offering. Assuming you’re happy with your current offering, extending it into new markets is a logical next step. This is aptly called a market development strategy. If you have identified potential new markets as opportunities, use these strategies to reach them.  Here are some quick considerations to make before executing a market development strategy:

• Is the market attractive? (To really answer this question, I recommend some form of market research to validate your gut feeling.)
• Are you willing to commit the required time and resources to reach this new market?
• Can your business be adapted to the new market?
• Will you maintain your current competitive advantage in this new market?

Expanding Geographically

When you’re thinking about expanding, first think about where you want to cultivate new business. You have options: other regions, nationally, or internationally.  Geographical expansion works well for a company that wants to expand its service territory because it needs a physical location to serve its customers. Clearly your ability to expand is subject to your ability to finance such as expansion. See “Executing Your Growth Strategy” later in this chapter.  Many of the big boys of business, including McDonalds, Wal-Mart, and Home Depot, have exported their operations to other countries. On a smaller scale, many microbreweries have opened up new locations in various metro areas and airports in the United States as a way to expand their geographical reach.

Reaching into new market segments

You can also grow by reaching a completely new set of customers or market segments. This area is such a popular growth strategy because you leverage the products and services you already have developed. (Flip to Chapter 11 for the entire story on new market segments.)

Examples of this strategy abound, such as Bayer aspirin now being sold not just for aches and pains, but also for heart attack prevention if taken daily.

You may also be interested in:

• Choosing a Market Penetration Strategy
• Choosing a Product Development Strategy
• Common Sense Market Research Begins with Identifying Your Needs in the Planning Process

Topics in this post: Strategies |