Market development strategy - Everything businesses need to know

 

What is the market development strategy?

A go-to-market strategy is a business development strategy that focuses on making products available to new markets. Companies often use this strategy to identify and capitalize on opportunities to sell products to untapped potential markets.

The company can also use a market development strategy to create new product lines to sell to existing customers.

Why do you need a market development strategy?

Market development strategies can help businesses:

Improve the quality of products and services

Attract new customers

Sell ​​more to existing customers

Developing new products and services

Increase revenue

Increased endurance

Support long-term growth strategy

Increase leads and sales

Create more value for customers

Increase brand awareness

Reduce variable costs

 

Types of market development strategies

There are 4 main types of market development strategies

 

Market penetration

The purpose of this strategy is to increase sales of existing products and services in existing markets, thereby increasing the market share of the business.

To do this, businesses can attract customers of competitors, ensuring that customers use their products and services more often.

This strategy can be implemented by reducing prices, promoting promotions, improving distribution channels, acquiring competitors, or modifying products to a moderate extent.

Market development

Market development strategy aims to increase sales of products and services in unexplored markets.

Market expansion is the analysis of how a company's existing products can be sold in new markets or grow in existing markets.

Methods include categorizing other markets, selling to businesses things that are originally sold to individuals, and selling in other geographic regions (domestic and foreign).

 

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Product development

The goal is to launch new products and services in the current market.

New products are launched with the hope of selling to existing customers to increase sales.

New product development methods: investing in product research and development, acquiring the right to manufacture another party's product, purchasing another party's product and branding it, collaborating with the business in need distribution channels and the company's brand.

 

Diversification

This is the riskiest strategy when launching a new product in a new market.

Diversification strategies fall into four sub-categories:

Horizontal diversification

Horizontal diversification is understood as a method of product diversification to add new products unrelated to the existing product line to the company's line to serve existing customers.

Vertical diversification

The company manufactures products related to the organization's domain that the supplier or customer needs. An example of this is a construction company that sells paints and other building materials.

Concentric diversification

Concentric diversification includes the development of new product lines and services that have the same technical and commercial characteristics as the old product lines. This form of diversification is often used by small producers of consumer goods such as bakeries,...

Conglomerate diversification

This strategy mainly involves offering new products or services to new customers. It is used as a strategy to grow in the market and attract new customers who are not interested in existing services.

 

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Successful market development strategy from Coca Cola

Coca Cola and Pepsi compete very fiercely, therefore, in order to survive and develop, Coca Cola is forced to always innovate and develop the market.

 

First, to penetrate the market, Coca Cola communicated by associating its brand with Christmas, which significantly increased sales during the festive season.

In the 80s of the 20th century, Coca Cola developed a new product line with added lemon, cherry, vanilla, ... to earn huge profits at that time.

In 2005, Coca Cola expanded to male audiences with Coke Zero. Before that, the company had a low-sugar drink called Diet Coke, but this product was aimed mainly at women with a silver design. Changing the design to a strong black can, along with a contrasting black-and-white (male-female) marketing campaign, Coke Zero successfully attracted many male audiences. In addition, Coca Cola also expands its market to the whole world.

In 2007, Coca Cola moved on to its final strategy: Diversification. As customers became more and more health conscious, Coca Cola acquired Glaceu to enter the healthy beverage market. The company also produces other products such as T-shirts, pens, glasses, ... to satisfy the needs of customers.

 

Steps to develop a market development strategy

Step 1: Research growth opportunities

Before expanding into a market or developing new products, businesses need to identify opportunities through:

Identify target customers

Market analysis

Existing customer survey

 

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Step 2: Identify development goals

Identify the areas the company wants to improve. A few factors businesses can focus on:

Sales

Net profit

Staff

Product

Customers/Users

Geographical area

Step 3: Allocate resources

Create a list of available resources and where to get them. Resources include:

Raw material

Device

Software

Staff

Marketing materials

Money

…

Step 4: Develop a marketing plan

After allocating necessary resources, businesses need to develop a marketing plan to increase brand awareness and product demand. A few marketing channels for businesses to refer to:

E-commerce platform

Email marketing

Social media marketing

Print advertising

television

…

 

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Strategy to develop foreign markets through Amazon together with AGlobal

Exporting goods is a leap for businesses, which can help businesses increase revenue and expand many times, reducing dependence on a single market. Nowadays, with the help of e-commerce channels, exporting becomes a lot easier.

With its position as the world's largest retailer, a trusted destination for the majority of customers from many countries around the world, Amazon is the first choice for businesses looking to expand their markets.

 

Aglobal is the only business that is both an account management partner and an advertising partner of Amazon in Vietnam. With Aglobal, exporting goods becomes simple, streamlined and efficient.
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