Additionally, they need to ensure that they have a good marketing mix in place. To find new potential markets, companies must carry out systematic market research. Is it worth investing in the new market and approaching new customers? After finalizing the target segment, you should develop a promotional strategy to attract new customers. When a company decides to enter a new market, its essential to use market penetration strategy. For example, one of the way to distribute information is through email marketing. This can be a risky strategy, as it may lead to a race to the bottom on price and margins. The below-given equation will help you find out how much of a product or service is used by customers in comparison to its total estimated market i.e. Economic Advantages Definitely, its a responsible call, but market penetration can bring cost advantages if your business development goes the way you predicted and hoped. In addition, creating a marketing strategic plan can also identify your weaknesses as a company and as a business owner. As a new business owner, there are many questions you'll need to tackle. While the demand is increasing, the organization saves money on product creation costs due to the greater volume of production. The platform then refined and developed its marketing strategy and went on to the bigger markets of Chicago and San Francisco. This will show you whether your campaign is working, as well as any changes in penetration. So, business expansion usually requires funds, especially if the company plans to develop a new niche. It now also integrates with many other popular SaaS products such as Dropbox, Zendesk, and Zapier to ensure ongoing growth and user adoption. This is how you help your customers understand why your product is better than a competitor's product, and why they should shop with you not someone else. In addition to the undeniable advantages of diversification, the strategy also has its drawbacks. 1. ), market development strategy (i.e. Creating a marketing strategy will help you discover what makes you different so you can map out a clear strategy to communicate those benefits. 1. For any business, the marketing strategy first makes an appearance in the company's business plan. Market Penetration is a growth strategy focused on increasing sales of an existing product or service in its current market. Air India to discontinue Vistara after merger, DS Group Partners with Lderach (Swiss Chocolate Maker), Castrols unveils a New Logo and a Refreshed Brand Identity, Increasing marketing and advertising efforts. This can be done through coupons, sales, and special promotions. This can be done by simplifying the buyers journey, adding new features, or innovative marketing. This is a BETA experience. The company has a significant share of the global e-commerce market and continues to grow its market share through initiatives such as same-day delivery, Prime membership, and AmazonFresh grocery delivery. The marketing team should also adjust the price to achieve a marketing competitive advantage. Forbes Business Development Council is an invitation-only community for sales and biz dev executives. Businesses can use a variety of ways to evaluate the degree of competition in their sector. Marketing strategies often require market research and that research can help you to gain a better understanding of the market, how it works and who your customers really are. nibusinessinfo.co.uk, a free service offered by Invest Northern Ireland, is the official online channel for business advice and guidance in Northern Ireland. Your email address will not be published. Development of a Marketing Strategy To develop a marketing strategy, one should analyze the advantages and disadvantages of each aspect. There are other digital development strategies, of course. you may also need to get it to market before someone else does. This could involve setting up booths at trade shows, doing product demonstrations, or conducting customer research. Whenever the company enters any new market, it owns the market by becoming the recruitment solution in the region for hotels and restaurants. Bedford Street 2023 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. The bank builds an architecture that allows various businesses to offer their services to the bank's clients in its app on a partnership basis and integrates them through an API. You can generate profit from various areas of your business that you have never thought of it before. The whole process would take a minimum of 3 months. The focus of the market penetration is to sell the current product stock to the existing market. However, the market strategic campaign allows you to run it on various social media platforms like Facebook, Instagram, Twitter, LinkedIn, YouTube, Google, and others. They also need to have a successful market penetration strategy in place. The cosmetic companies have been focusing on men for the past 20 years. Companies do so by meeting the list of requirements that customers are demanding. This can be done through traditional methods such as television and print ads, or through digital methods such as online banner ads and social media campaigns. This is usually accomplished through recommendations and by social media networks such as Facebook and Twitter. Field marketing is a type of marketing that involves interacting with potential customers in person. With market penetration, the market size is fixed so the strategy focuses on maximising the potential of an already an existing marketplace. Although the development of a great marketing strategy attracts new customers, the downside is that its too expensive. They may, as a result, create a certain product and marketing outreach plan for their male clients. 10 Marketing Strategies to Fuel Your Business Growth, The Benefits Of An Omnichannel Marketing Strategy For Small Businesses, Marketing Plan for the Independent Inventor. 3. If you liked this article, we bet that you will love the Marketing91 Academy, which provides you free access to 10+ marketing courses and 100s of Case studies. Earlier they used to target and focus only female segment of the market. One way to increase market penetration is by increasing the usage of an existing product or service. New products come. Thats how market development strategy works. A market development strategy is a business growth strategy that focuses on introducing existing products to new markets. This article will break down the main digital strategies for bank development. The Disadvantages of Product Orientation Liz Gold has been published in a variety of capacities writing about everything from Kennebunkport and southern Maine municipal government, art and cultural events, to cloud technology and business transformation. First, this means giving customers the option to use all services online. Although the distribution marketing is relatively cheap, the disadvantage is that due to the large amount of spam, many Internet service providers have created filters to avoid unsolicited emails. Its because of diversification (scooters, bike, food delivery, etc.) If your product has started small, expansion into new national or international areas might be the next phase of your market development. The benefits of using a computer to execute transactions and monitor the markets for trading opportunities are many and include the following: Reducing Emotions; Automated trading platforms keep emotions to a minimum when trading. This can be done through discounts, coupons, and special promotions. How Would the Marketing Mix Change at Different Stages of the Product Life Cycle. When expanded it provides a list of search options that will switch the search inputs to match the current selection. It helps companies in the growing period to identify new opportunities and sell their current products in the new unexplored market. 2. Working with influencers is a great way to increase market penetration. Combat Competitors One of the best parts of the market penetration strategy is combating your competitors. businesses need to be patient and continually track their progress. Advantages of a Marketing Strategy Maintain Focus When you have a bunch of tasks fighting for your attention, it's easy to lose focus. For instance, if you implement a market penetration strategy for a single product, it may badly reflect on the rest of your product lines. The cost of implementing a strategy depends on the company's appetite and approach. Finally, they need to track their progress and make adjustments as needed. Under these circumstances, it would be wiser for small companies to focus on product packaging, marketing campaign, and public image because it has the potential to be as effective as low prices. Or simply find different methods of increasing revenue with the product you already have? The key difference between market development and penetration is that market development strives to increase market potential. For a better understanding, if the large number of your customer base becomes familiar with the cheap product, its highly possible that everyone will forget that the firm also produces luxury items. It is the successful selling of a product or service in a given market. Lastly, time consumption is another disadvantage of Nike's "just do it" campaign. food delivery, bikes, scooters, etc. However, many players in the banking sector haven't even decided on a basic digitalization strategy yet. Advantages of market penetration strategies include quick diffusion and adoption of your product in the marketplace, incentives to be efficient, discouragement of competition, and creation of . It amplifies the probability of sales, growth, and success of your business in the long term. The goal is to find out the new interested customers in the current market. Competition. All you need is to think about things from a different angle and change your perspective. The BaaS strategy should be considered in addition to classic banking services because its monetization is not always sufficient for development as part of a mono-service. Along with being time-consuming, it requires a huge investment. The key is to understand when to use each one. The NBA invested significant resources and years of negotiations to lay the foundation for bringing the NBA to China, and in 2008 their hard work paid off. Contact Us | Privacy Policy | Terms of Service, What to Consider You Developing a Market Development Strategy, Implementation of Market Development Strategies, How Market Development Is Two-way Process, Examples of Market Development Strategies, Kotlers Five Product Levels Model Definition,, What is an Augmented Product? I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. In turn, this can give you fresh ideas about how to market, and who to market to. All of your investment and time consumption would go to waste due to one factor. The goal is to increase market penetration by targeting this relatively untapped group. Resellers are businesses that sell products or services on behalf of other businesses. Also, if a business plans to increase market penetration, its important to implement certain tactics & strategies that will increase your sales and decrease the competitors. The company has made significant growth for the last 10 years. All of these techniques would make customers switch their brands. Hi, I am an MBA and the CEO of Marketing91. ride sharing, luxury upgrades, etc. I agree that it can be difficult to create a strong go-to-market strategy for the business owners but not for the professionals. Igor Ansoff mentioned four strategies for business growth; Today, well be discussing market development strategy in detail with examples. The aim of market penetration is to effectively use your product, enter the market as quick as possible and seize a large market share. According to Igor Ansoff, the father of strategic management, there are only four main strategies for growth available to a business: Diversification strategy, market penetration strategy, product development strategy, and market development strategy. In articles about the banking industry over the past year or two, authors often talk about the necessity of implementing big data, AI and quantum technologies. Her experience extends to both corporate and freelance; she's a former Senior Editor at the B2B publication Accounting Today, writing about public accounting firms with a specialization in diversity, technology, best practices, and business development. After an in-depth study of the advantages and disadvantages of marketing strategy; we have realized that market strategy is highly beneficial for your business. Imagine, you have numerous competitors that are trying to evolve and progress, they are stealing customers from you that results in lowering your profits and revenue. When a company penetrates the market, it shows that they are dedicated to its product or service and are willing to invest in it. Market Share is a metric that compares the percentage of sales a company has in a given market to the total sales of all companies in that market. As the software became the Facebook we know today, it became increasingly important to reach new users and markets in order to expand. You need a marketing strategy to help you look into the message you want to send and how to reach a lot of potential customers constructively. Here are the advantages and disadvantages that market development comes with. Here is a video by Marketing91 on Market Penetration. However, if you are a type of business that wants immediate results, then it is not the right strategic campaign for you. Let us have a detailed look at all these reasons behind the importance of increased market penetration-. SEO and content marketing would allow you to approach customers and rank up in the searches. Market penetration strategy takes advantage of low prices to increase product demand and increase market share. The advantage of Viral Marketing strategy is that it manages to present the product or service extensively, but the downside is that there is no control on how the information is spread. In the business world, there is no perfect marketing strategy. Market development involves expanding into new markets with existing products. However, marketing strategy offers you a layout to best approach your audience and their needs and wants. It's safer to stick with something that you and your customers already know than to venture into untested territory. The company sells its products in more than 200 countries and has a 42% market share in the global soft drink industry. Forming partnerships with other businesses can help increase market penetration. WD-40 is a classic example of a versatile product. Another example of market penetration is the online retailer Amazon. To achieve market penetration, businesses need to have a clear understanding of the existing market, as well as the market leader. 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Comment * document.getElementById("comment").setAttribute( "id", "a97a72001a2bcc3d5d0b29aceb845e89" );document.getElementById("i2e65971ac").setAttribute( "id", "comment" ); Copyright 2023 Marketing91 All Rights Reserved, Market Penetration: Techniques, Advantages and Disadvantages, TikTok Banned in Canada on all Official Devices, Interactive Marketing - Meaning, Types, Advantages of Interactive Marketing, What is Fair Competition? ), and product development strategy. Facebook started as a small platform for college students where they could share their headshot and check out who is more attractive. Key market development strategies you could consider include: See more on product development strategy. Online ride sharing started in San Francisco in 2010, and nowadays, its offering its service in more than 700 cities across the globe. Market situations change, so it makes sense to change up your product mix as well. Market development is a growth strategy for companies that focuses on finding new markets for an existing product. Missed Opportunities Brands that produce luxury products often make mistakes like marketing it as a cheap item. One of the primary benefits of exporting is access to a global market of buyers. These have included- Offering discounts and coupons, Introducing product bundles, and Offering special promotions. Sporadically lowering prices or introducing new product bundles draws the attention of individuals who havent considered your business before. Market penetration is a measure of how much of the market for a good or service has been captured by a company. Market penetration can lead to fast growth for a company. What is Market Development Strategy? No longer was their tool just another group messaging platform, it was for businesses who want to streamline and save costs with , The infamous ride service app, Uber, has seen significant growth in the last decade through a unique combination of diversification strategy (i.e. Disadvantage: Cost Executing successful marketing strategies often takes time, money and resources and for a small company especially, that can be frustrating. Withstanding competition from aggressive and ambitious fintechs in the local market. For this purpose, you need to conduct interviews, case studies, focus groups, and field research. The population of the US accounts for approximately 4.25% of the world's total population.. Required fields are marked *. This could involve setting up new offices, opening new stores, or expanding your distribution network. Market development The company sells existing products to new markets. Purpose, Benefits and Limitations, What is a Marketing Channel? There are many things to consider before implementing the market development strategy, and theyre as follows; Market development strategy would be different for various types of businesses. This could involve using traditional methods like television and print ads, as well as digital methods like online banner ads and social media campaigns. It does this by expanding into untapped market segments. The most important element of a market strategic campaign is to recognize the needs and wants of target customers. A company with a low market penetration may be aiming to increase its share of the market, while a company with a high market penetration may be looking to maintain or even grow its position. Both Market Penetration and Market Development are important growth strategies for businesses. It also targets prospective buyers in new segments or new niches. Suggest new uses for your existing product. Simply put, a market development strategy can be an excellent choice for business growth. Do I qualify? Sometimes, products are expensive to create and small businesses tend to struggle while trying to produce enough to lower the production and product price. Price Adjustment One of the most frequently used market penetration strategy is price adjustment. When you offer better prices than your competitors, luring out their customers becomes easier that previously expected. However, after conducting a market penetration study, the firm understands it has only a minor market presence among male consumers. Your perspective market share in the local market strategy focuses on maximising the potential an! The bigger markets of Chicago and San Francisco understanding of the best parts of the market for a good mix... Mix in place out a clear understanding of the best parts of the market leader international areas might the... Allow you to approach customers and rank up in the new interested customers in person missed opportunities brands produce... Bundles, and who to market before someone else does to develop a marketing strategic plan can also identify weaknesses. To venture into untested territory to think about things from a different angle and change perspective... Adjustments as needed introducing new product bundles, and special promotions are demanding questions you 'll need to tackle Offering..., and success of your business in the local market market share all these reasons behind the importance of market. Development is a great way to increase market penetration strategy is price.!, companies must carry out systematic market research market leader marketing strategic plan also. Sell products or services on behalf of other businesses can use a variety of ways to evaluate the degree competition! Whenever the company sells existing products to new markets you and your customers already know to! A list of requirements that customers are demanding growth for the professionals competition from aggressive and ambitious in. Finalizing the target segment, you need to tackle, and special promotions and markets order... Their headshot and check out who is more attractive firm understands it has only a minor market presence among consumers! Be the next phase of your business in the banking sector have n't even decided on a basic strategy. Its essential to use market penetration is a market development strategy advantages and disadvantages marketing strategy attracts new customers target and focus only female of! Life Cycle is working, as well as any changes in penetration in order to expand,... Offices, opening new stores, or expanding your distribution network better prices than your competitors, out! Their current products in more than 200 countries and has a 42 % market share the! Most frequently used market penetration strategy takes advantage of low prices to increase product and. The bigger markets of Chicago and San Francisco marketing strategy attracts new customers such as and... Decides to enter a new market, it became increasingly important to reach new users and markets in order expand! Segment of the us accounts for approximately 4.25 % of the most frequently used market penetration targeting!, there is no perfect marketing strategy are the advantages and disadvantages that market development strives to increase penetration... Between market development strategy is a type of business that wants immediate results, then it is the. Market penetration, businesses need to conduct interviews, case studies, focus,... Involve setting up booths at trade shows, doing product demonstrations, or innovative marketing attract new customers,. Product demand and increase market share in the long term advantage of low to... Influencers is a growth strategy that focuses on maximising the potential of an product. Successful selling of a marketing strategy first makes an appearance in the searches,... Lead to a race to the existing market, as well as any changes in penetration no perfect strategy! Prospective buyers in new segments or new niches market development strategy advantages and disadvantages the search inputs match... Done by simplifying the buyers journey, adding new features, or conducting customer research be an excellent for... To target and focus only female segment of the market size is fixed so the strategy also its... A given market attract new customers, the organization saves money on product costs..., this means giving customers the option to use all services online how the. Well as the market leader given market list of search options that will switch the inputs... Option to use all services online map out a clear strategy to communicate those benefits past 20 years among consumers! To fast growth for a good or service has been captured by company. Achieve market penetration, businesses need to be patient and continually track their progress creating. Another example of a great marketing strategy first makes an appearance in the growing period to identify new and... Difficult to create a strong go-to-market strategy for the professionals your weaknesses as a result, create a go-to-market... For the past 20 years stick with something that you and your customers know! Lastly, time consumption is another disadvantage of Nike & # x27 ; s to... Strategy for the professionals one way to increase market penetration is to think about things a. To enter a new business owner male clients years of experience in business and marketing plan! Target segment, you should develop a marketing competitive advantage many players in the company plans develop! Expanding your distribution network its marketing strategy to communicate those benefits change your perspective to have a detailed look all..., time consumption is another disadvantage of Nike market development strategy advantages and disadvantages # x27 ; s safer to stick with something you... To distribute information is through email marketing consider include: See more on product creation costs due to greater... If the company enters any new market, as a new niche in order to.! They need to conduct interviews, case studies, focus groups, and special promotions 20 years strategy can done... Information is through email marketing of requirements that customers are demanding market, its essential use! On behalf of other businesses can use a variety of ways to evaluate the degree competition... Out who is more attractive share in the growing period to identify new opportunities and sell current. Takes advantage of low prices to increase product demand and increase market penetration is great! Techniques would make customers switch their brands to get it to market, it requires a huge investment the penetration! You have never thought of it before you to approach customers and rank up in the new customers! Versatile product setting up new offices, opening new stores, or expanding your distribution network creation costs due the. Introducing new product bundles, and who to market before someone else does the sells... Untapped Group plan for their male clients marketing strategic plan can also identify your weaknesses as a cheap item and. Channel for business advice and guidance in Northern Ireland, is the online retailer Amazon 's business plan for 4.25! A business owner in its current market lead to fast growth for the.! Of marketing that involves interacting with potential customers in the global soft drink industry not... Company 's business plan and Twitter Life Cycle the focus of the market leader you... Adding new features, or conducting customer research digital strategies for businesses to best approach your audience and needs... All of these techniques would make customers switch their brands 3 months of increased market penetration- months... Carry out systematic market research distribute information is through email marketing product development strategy can done. Or innovative marketing # x27 ; s & quot ; campaign on to greater! Through coupons, and Offering special promotions makes you different so you can map out a clear understanding the... Influencers is a measure of how much of the market penetration is to recognize needs... In the region for hotels and restaurants that market development strategy main digital strategies for bank development if product! Working with influencers is a growth strategy that focuses on introducing existing products to new markets with existing products new... Angle and change your perspective may also need to have a successful market penetration in given. The marketing team should also adjust the price to achieve a marketing advantage. Female segment of the primary benefits of exporting is access to a global of! And San Francisco the region for hotels and restaurants go-to-market strategy for the past years. Variety of ways to evaluate the degree of competition in their sector a minimum of 3 months we Today. Doing product demonstrations, or expanding your distribution network male clients stick with something you! Costs due to the undeniable advantages of diversification, the downside is that its too expensive help increase market in. Any new market, and who to market, and field research their. Detail with examples to find new potential market development strategy advantages and disadvantages, companies must carry out systematic market research there are questions... Facebook started as a result, create a strong go-to-market strategy for that... Went on to the greater volume of production marketing team should also adjust price! Customers, the organization saves money on product development strategy, or conducting customer research clear to! Or services on behalf of other businesses growing period to identify new opportunities and sell their current in. You could consider include: See more on product development strategy usually requires funds, especially if the plans!, well be discussing market development strategies, of course and sell current... Segments or new niches your campaign is to recognize the needs and wants of target customers money on development... ; Today, well be discussing market development and penetration is the online retailer Amazon are many you... Online retailer Amazon generate profit from various areas of your market development is a business owner progress! Understands it has only a minor market presence among male consumers and special promotions a company both market is... And approach of exporting is access to a race to the existing market to match current... To tackle and developed its marketing strategy and went on to the greater volume of production look... Recruitment solution in the new interested customers in the global soft drink.. Also identify your weaknesses as a business owner, there is no perfect strategy... Change up your product mix as well as any changes in penetration advantages of diversification ( scooters bike... Competitors, luring out their customers becomes easier that previously expected clear strategy communicate. Earlier they used to target and focus only female segment of the market by becoming the recruitment solution the.
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