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What is Market Development?
Mary McMahon
Mary McMahon
Market development is a marketing technique aimed at increasing a company's market in order to widen the customer base for the purpose of selling more products. There are several approaches that can be used to make a market larger, ranging from capturing customers of rival companies to expanding to a previously unserved segment of the market. These practices are organized and driven by marketing personnel who can work within a company or be consulted specifically to assist with market development.
When a company believes that it has a need to increase the size of its market, the first step is usually a development of a profile to find out what segments of the market are currently being served. This study includes an analysis of the kinds of customers the company has and what those customers are buying. This information is used to develop an efficient and comprehensive market development strategy. Companies must use cost effective strategies so that they do not end up spending more money developing a market than they could potentially earn by expanding the market.
One aspect of market development involves getting current customers interested in products and services that they are not currently buying. This includes newly launched products and services. Such customers can be a potentially easy sell because they already have a relationship with the company and may be predisposed to expand that relationship. Another tactic requires identifying consumers who buy from rival companies and finding ways to appeal to them, such as offering targeted promotions.
Customers who are not buying a product or service at all are a potentially untapped market. Market development can focus on introducing them to a company or brand to get them interested so that they will become customers. Finally, companies can expand their markets. If a company is only selling in one region or focusing on a given demographic, it can expand its reach to increase the size of its market.
Developing a strong market development strategy is an important aspect of helping a company grow. If companies are limited by only having a small share of the market, they can find it difficult to sell more products, raise capital, and expand their operations. Small companies with limited marketing experience may turn to consultants for this, while experienced large companies have internal marketing departments that may be responsible for market development. It is an ongoing part of doing business for successful companies.
Mary McMahon
Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a WiseGEEK researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.
Learn more...
Mary McMahon
Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a WiseGEEK researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.
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Discussion Comments
Crispety-Wow, I did not know that companies did that. I think that having a good growth strategy is also important.
Once you have gained the necessary market intelligence then you have to determine how your company will grow.
You have to decide if you will be introducing new products or services not yet on the market or growing the market share of your top performers.
This could include entering foreign markets and making the product international. In this case you may have to develop a market development agreement or a market development cooperator program that outlines your rules for selling the product or service overseas.
Development in India and other developing countries with growing economies might be a good strategy for future growth. Countries that allow capital market liberalization and development would be best.
Sunshine31- Often market research companies also do covert studies in which a mystery shopper might be sent to a business in order to compare their business level.
Sometimes companies hire market research firms to conduct competitive mystery shops. In this case, the client of the market research firm is looking to conduct competitive analysis and needs information on the shopping experience of a potential customer along with quantitative data such as product assortments, inventory levels, best sellers and overall merchandising standards.
Sometimes information on the selling process of a competitor is also helpful to the client company. The more you know about your competitor, the better able you are to advance your product or service and gain market share.
SauteePan-A business market development includes a strategy for growth that will allow the brand to increase market share.
A full analysis of your current product offering along with a competitor’s product assortment helps. This allows you to see what advantages you have over your competitor and what advantages they had over you.
Sometimes the opportunity for growth is found in the staff. This results in employment development.
A market development plan includes significant market research development. In order to grow your market you first have to understand how your product is perceived in the marketplace and what areas of improvement are there.
Using market research firms helps to determine your opportunities as well as perceived strength. A market research firm like Informa Research Services or Martiz Research can perform various studies to meet these objectives.
They can perform focus groups that allow them the opportunity to interview a panel of subjects that most closely relate to your target market. They can ask about existing attitudes toward your product or service and gain the necessary insight on how to improve your brand.
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