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.
