market development and market penetration were two of four distinct company growth strategies identified by igor ansoff in a 1957 “harvard business review” article. market development is the use of an existing product or service offering to attract new customer market, whereas market penetration is an effort to dig deeper within an existing marketplace. increased market share is a common marketing objective of companies using this strategy. adding more convenient business locations or remote locations may also help you access more customers in the existing market. at some point, the additional customers you gain through more investment in marketing don’t provide enough return on investment to justify continuing with this strategy.
aggressive market penetration through competitive advertising methods may help attract some customers, but it can also lead to responsive attacks from competitors and, potentially, legal issues if you make untrue claims in the ads. as long as you have other potential markets, you can grow through market development. this is especially true when competitors haven’t already targeted the new potential market. the major risk of market development is that it typically requires capital investment in expansion, either to build new locations or to expand marketing efforts to new territories. if the new opportunity doesn’t pay off, the company wastes capital and resources it could have invested in other strategies. a local lawn service provider, for instance, may struggle to satisfy existing clients if he expands the business too far and has difficulty getting all of the work completed in a timely manner.
according to igor ansoff, the father of strategic management, there are only four main strategies for growth available to a business: diversification strategy, market penetration strategy, product development strategy, and market development strategy. free trials, targeted content marketing, advertising, and experimenting with pricing strategies can be a useful part of your marketing development strategy, as they can encourage non-users in your existing market to become customers. part of slack’s market development strategy includes obsessing over user behavior to increase its usage and grow revenue from its existing product.
with a central focus on how people use the app, and what they are trying to accomplish while they do so, facebook can constantly develop new market strategies to drive growth, all within their core product. for additional examples of market development strategy outside of saas, we can look to athletic brands such as adidas and nike, who continue to expand their global reach and attract new demographics of customers with their existing footwear products. subscribe to our free email newsletter to get our latest stories delivered to your inbox (about twice a month).
product development and product diversification were the other two. market development is the use of an existing while market penetration is the lowest risk growth strategy, market development is a close second market development vs. market penetration. market penetration focuses on the sales of existing, market development strategy, market development strategy, market development strategy examples, market penetration strategy, market penetration examples. market penetration: this focuses on increasing sales of existing products to an existing market. market development: this strategy focuses on entering a new market using existing products. diversification. diversification: focuses on entering a new market with the introduction of new products.
this also consists of one quadrant move so is riskier than market penetration and a similar risk as market market development is the strategy or action steps needed to increase market share or penetration. market penetration, product development. with this approach, you’re trying to sell more of the same things to the,
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