Most businesses expand offerings, develop new products, and enter new markets at some point. However, that doesn’t mean these market development strategies are easy to come up with or to execute. Below are several tips on how to create and implement a market strategy that ultimately brings considerable improvement to a company’s bottom line.
Understanding the Basics of a Market Strategy
A market development strategy is a plan that outlines the necessary steps for a company to succeed with acquiring and selling to new customers or with penetrating a new market. It can cover such activities as launching a new product or service, changing a company’s branding, or introducing an existing product into a previously untapped marketplace.
The main question a market strategy document should answer is why a company is choosing to launch a new product or take another of the above actions. It also answers who the company created the product for and steps it plans to take to increase customer engagement with the product. The document should also list potential customer pain points and how this specific offering will address them.
According to Salesforce.com, the success of these strategies often falls on sales executives to find a path to profitability.
Questions to Ask Before Producing a Market Strategy
Sometimes business leadership can feel so eager for success that they move ahead without creating a strategy or don’t devote the time to it that it deserves. Asking these questions before writing the market strategy can help it to be much more effective:
- Is the business adaptable to a new market?
- Will the business keep a competitive advantage it already has in the new market or will it need to play catch-up?
- Is the market sustainable and growing?
- Who is available to research the new market and gather resources about it?
Common Market Penetration Strategies
As one of the most common ways to penetrate a new market, price adjustment means to lower the price of an item below that of the competition to gain more customers and increase sales. However, the price shouldn’t remain too low for too long. Once the business feels more competitive, it can increase its price to be more in line with what established businesses charge. Other ways to penetrate a new market include:
- Product Improvement: It’s human nature for consumers to want new and better products. That’s why it makes sense for companies to continually strive to make products as easy to use and beneficial as possible and announce the changes to customers.
- More Promotion: Establishing an advertising budget and aggressively marketing a new offering is one of the most effective ways to increase sales.
- Improving Distribution Channels: Obtaining new avenues of distributing a product, especially when a company is selling products in a geographic area for the first time, is an essential component of market strategy success.
When implemented correctly, each of these strategies should lead to increased product use, production, and repeating the above steps multiple times.
Don’t Scrimp on Talent
Developing a market strategy is hard work, let alone implementing one. It’s not something that just anyone can do. Organizations must be willing to hire the most talented people to achieve continual growth. Even when money is tight, hiring people just because they don’t command as much money makes little sense for an organization trying to compete and grow.