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.
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]
- Market penetration
- Product development
- Product diversification
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.
PREV DEFINITION
NEXT DEFINITION
Related News
- Flexible space demand rises in step with return to officeThe report further mentions that the new work way is expected to enable flexibility for employees while furthering productivity gains for businesses and includes a hybrid way of working wherein employees come into the office a few times a week.
- 74% Occupiers to shift from location-centric to people-centric workspaces74% of the occupiers looking towards distributed workspaces as a strategy to shift from location-centric to people-centric workspaces.
- Anirban Gupta joins Colliers as Managing Director, Kolkata to drive business growth in East IndiaGupta joins Colliers with nearly 20 years of experience across real estate leasing, investments, asset management and new business development
- Industrial-warehousing spaces leasing in Jan-June up 31% in top 5 cities: ReportNew supply jumped over two-folds to 15.1 million sq ft from 7.3 million sq ft during the period under review.
- Toyota and Suzuki agree to discuss projects for tech and market development, vehicle productionIndia is at the core of this global tie-up after both companies concluded a memorandum of understanding toward business partnership on February 6, 2017.
- Grasim Q4 profit jumps 18% to Rs 373 crore
- Bad omen for markets from first signs of yield curve inversionAn inversion at the front end of the U.S. curve is a significant market development.
- First SME company from J&K lists on NSEShares of Sarveshwar Foods closed at Rs 70.05 apiece today, 17.59 per cent down from its issue price of Rs 85.
- First SME company from J&K lists on NSEShares of Sarveshwar Foods closed at Rs 70.05 apiece today, 17.59 per cent down from its issue price of Rs 85.
- Royal Enfield announces foray into Argentina marketThe motorcycle maker launched its first flagship store in Buenos Aires, commencing its full operation, including after sales, spares and service.