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.
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?)
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.