For many companies, market development is a viable and successful growth strategy. It’s a way in which you can see how current products or services your company offers can be used in new market segments. In short, it’s looking for potentiality through either new users or new uses.
Firstly, looking at new users. This can be done by identifying new geographical segments, due to regional, national or international expansion. This may seem fairly straightforward, however, when looking at this type of expansion, especially on an international level, different cultures, customs and spending habits have to be taken into account. Another potential area is looking at new demographic segments. For example, if your product or service is aimed at a younger audience, how can an existing product be altered or marketed to appeal more to older generations? This type of approach is a good way of avoiding market saturation, as you’re not allowing your product or service to be tied up within one demographic. If this was the case, the demographic-specific market can be expected to drain at a faster rate than a mix of demographics supporting a brand.
New uses can sometimes be harder to identify. This is especially the case for a company that offers products instead of a service. Services can be easily adapted to incorporate new features over a shorter period without there being an impact on previous services offered. A more realistic approach for products is to see how new uses can be adapted into new product designs without having a negative effect on its previous uses. However, this doesn’t mean it’s impossible for there to be new uses for existing products that have not yet been identified. These can be identified either by research and development within your business, or through market research with current users of a product, or potential new consumers.
For many companies, this type of market intelligence is desirable but not practical to obtain. This may be due to the size of the operation needed to gather relevant information, the specialisation needed, or the resources needed to adequately collect this data. If this is the case, it might be worth considering outsourcing this particular process to market research specialists, as this will largely save on resources and time. It must also be considered that the quality of information gained from these specialist companies will most likely be higher than that which you could produce in-house, without using up a substantial amount of resources.
