Market development is the process of entering new markets to expand revenue and reduce concentration risk. This involves identifying a target market and finding a way to sell to them. Target markets are a flexible concept that can include factors like location, demographics, customer needs, customer preferences and lifestyle. As target markets are diverse, so are strategies to reach them. The following are common types of market development strategy.
Implementing price structures and strategies to target a set of customers. For example, an airline offers a May to June discount ticket plan for groups greater than 18 people for certain domestic routes. This price strategy is aimed at attracting the large number of schools who take a school trip in May and June.Developing new distribution channels to reach target customers where they shop including physical and digital locations. For example, a brand of sunglasses that would like to sell to snowboarders develops distribution agreements with snowboard shops.
Developing a new brand for products to reach a target market. For example, a manufacturer of warm socks that creates a brand to appeal to snowboarders.Reaching a new target market with tailored marketing messages such as offers, promotional videos and coupons.
SalesDeveloping a pipeline of leads, opportunities and quotes to close sales with the target market. For example, a software company that traditionally sells to large firms begins to target mid-sized companies.
Developing a new product for the target market. This can be an alteration of an existing product such as warm socks that are designed with new colors and patterns to appeal to snowboarders. Alternatively, it can be a major initiative that reinvents your business model or product line.
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