Product plays crucial role in commercial activities of each company. If company sell a large number of product, it will get a lot of profits. So that, many companies often carry on developing market to approach new customers, new segments, etc. In business, this activities are called Market Development.
What is Market Development?
Market Development is a marketing strategy in which a company tries to sell an existing product to a new group of consumers.
The seller may do this by promoting the product in a new geographical area. It may also try to present it in different media. For example, if the product currently sells to young people, it may try placing adverts in publications that older consumers read.
In other words, it is a strategic step a company takes to exploit an existing market further. It takes this step rather than trying to look for a new market.
4 Steps in Development Market
There comes a time in every organization when the growth is limited, and the market is saturated. In such cases, the company has to look for new markets for their existing products. To implement a market development strategy, the organization has to pass through multiple steps.
Before implementing a market development strategy, the organization has first to have proper business goals and objectives and also a plan to accomplish it. Following are the four steps which organization in the market development:
1. Define the Target Market
Before starting the Market Development, the company has to think about the customer. The primary question in this stage is to answer who your customer is. Customers can be differentiated on their age, gender, status, and many other factors. A clear target market will always help the organization to plan their Market Development accordingly.
With the help of digital marketing, advertisements are targeted explicitly to the selected audiences. Similarly, if the target market is not defined correctly, then there is a possibility of the market development process going haywire.
2. Market research
The next up is to conduct thorough market research related to your customers and products. The market research can be to address many questions like what does the financial profile of the target audience, what is the income levels of the target audience, what are the competitor products are used by the target audience, why are the customers using the competitor products, etc.
Proper market research will help to build a healthy market development plan. Analyzing the buying habits of people, understanding their interests, effect of various factors which influence the buying behavior of the customer like climate, geography, political factors, sociological factors, etc. following what products are the customer is currently using and why are they using is a most crucial part of market research.
Once the analysis and market research is completed, and you will have a good idea about the growth potential for your product in this current market. If the market plan is lucrative and will be able to get decent profits, then you can enter the market.
There is always going to be some risk in a new market, and your ability to face that risk will determine whether you want to enter the market or not. If you do not want to go even with the slightest chance, then no market will be suitable for your product but if you’re okay with some amount of risk, then the market is good enough.
4. Plan to enter Market
Once you have decided to go ahead with the new market, then the next step would be to develop and implement as well as execute an excellent strategic plan to promote your product or services.
A detailed marketing plan and promotion plan should be in place to introduce and promote your product to the new target market. This plan should include many factors such as point of purchase, media, advertising plan and advertising medium that you’re going to use.
As the customers are established in the new target area, you must focus on their needs. Customer satisfaction surveys, after-sales service, will help to find out what customers liked or disliked about your product or service. Personal touch or asking them personally will help you get direct answers.