Market development is a growth strategy that identifies and develops new market segments for current products. A development strategy targets non-buying customers in currently targeted segments. It also targets new customers in new segments. A market development strategy entails expanding the potential market through new users or new uses. New users can be defined as new geographic segments, new demographic segments, new institutional segments or new psychographic segments. Another way is to expand sales through new uses for the product. Show For discontinuous innovations, which are those that impose a change of behavior, new learning, or a new process on the buyer or end user, a focused market development strategy is needed to bridge the gap between the early market and the mainstream. A marketing manager has to think about the following questions before implementing a market development strategy: Is it profitable? Will it require the introduction of new or modified products? Is the customer and channel well enough researched and understood? See also[edit]
Suggest a new Definition Proposed definitions will be considered for inclusion in the Economictimes.com Definition: Market development is a strategic step taken by a company to develop the existing market rather than looking for a new market. The company looks for new buyers to pitch the product to a different segment of consumers in an effort to increase sales. Description: Market Development is a 2-step process to tap the untapped market. It begins with market research wherein a company does a segmentation analysis and short ists market segments which are worth pursuing. It is an attempt to use the existing product or service to attract new customers. The goal is to expand the reach or tap into a different segment or unexplored market. A segment is defined as the small sub-group of a larger population. For example, the marketing team of the company can divide the market based on geography, demographics as well as income levels etc. Once the company decides which segment to choose, the next step of market development involves creating a promotional strategy to enter into the market. For that, companies may have to take the support of both audio and visual media to push the product deeper into the market. Another aspect is the pricing of the product. If there are competitors in the market, you may have to price the product accordingly or come out with a product which belongs to the same segment but differs in features, quality etc. to command higher pricing. To counter competition, the marketing team could look at the penetration pricing where you can aggressively price the product below competitors product to gain market share. The major challenge faced by firms, which want to indulge in market development, is that it is a costly affair. It requires huge capital investment to keep the project going. If the investment in the new segment doesn’t pay off as desired, then the whole exercise turns out to be worthless.
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