Market Development Strategy
What is a Market Development Strategy
Market Development Strategy Definition
Market Development Strategy is a growth strategy put in place by companies or organizations to introduce their product or solution to target audiences they have not yet reached or are not yet currently serving.
As an example, let’s say your software company has a new product offering available.
In order to come up with a market development strategy, you need to research who the new product would work best for, and the best way to target them — that, in a nutshell, will be your market development strategy.
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Things to consider when creating a new market development strategy
There are several factors to consider when determining if your company is ready to develop a new market development strategy for your product:
Is there a specific target audience (market) you’re not yet serving? Would this audience truly benefit from your new product offering?
Do you, or your team, have the bandwidth to develop and measure the effectiveness of a market development strategy?
Will your effort in reaching this new market be worth the investment from your company or organization? (What is the ROI?)
Examples of market development strategies
Here are a few popular market development strategies:
Geographic expansion
One way to reach a new audience with your product is by geographic expansion.
For example, If you’re currently only targeting US customers, research what it might take for your company to expand your audience on a global level.
Or, if you’re currently only serving tech companies in New York City, research whether or not it would make sense to target San Francisco tech companies as well.
Upselling to existing customers
If all, or some, of your current customer base, could benefit from your new product offering, consider using your relationship with them as a gateway to introducing your new solution.
Attracting non-users
Along with (or separate from) upselling to current customers or clients, you can also develop a plan to target non-users of your product. This can be achieved through a variety of methods, including offering free trials, cold outreach, advertising, etc.
Attracting competitors’ customers
Who else is making a product like yours? And how can you convince their customers to migrate to you? Maybe you can adjust your pricing, offer incentives or discounts, use lookalike audiences in advertising, or deliver a superior user experience.
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Benefits of a market development growth strategy
Market development strategies are the key to growth.
While it can feel more comfortable for businesses to continue to cater for their existing niche customer base, it prevents any opportunity for scale.
A market development growth strategy helps businesses guide their efforts in a way that grows the business and drives market development.
This is achieved with proper risk management and in-depth market research to help avoid common pitfalls found when trying to grow a business.
Market development stages
Before you start crafting a market development growth strategy however, it’s worth better understanding the journey you had ahead.
There are four key market development stages. By following the stages, businesses can easily enter a new market and grow their business.
Stage one: Define
Before a business can enter a new market, they need to know what that market is and who they need to target to achieve market penetration.
The first of the market development stages involves identifying the customer — that way, businesses can better plan their strategy using insights from the defined target audience.
Stage two: Research
Of course, to utilize insights, you first need to find the data that can give you them.
Businesses should perform thorough market research that relates to their customers and products.
This includes information on customer habits, competitor products, why customers use your competitors, and what those competitors are lacking.
Stage three: Weigh up your options
With all the information you need in front of you, you can make an informed decision on if the market is worth pursuing or not.
There will always be a risk to entering a new market, but by defining your audience and researching the market, you can lessen that risk by looking at a range of variables.
Stage four: Plan
If your research analysis shows potential, it’s time to plan how you’re going to enter the new market. This is the last of our market development stages and involves looking at how you will promote this new venture, how it will work, and how to continue to grow once you have established a presence in the market.
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