When it comes to business, market penetration is key to success. Part of Slacks market development strategy includes obsessing over user behavior to increase its usage and grow revenue from its existing product. Marketing strategy allows you to perceive things from the customers point of view, and highlight the unique selling point (USP) of your business that would give you a competitive edge. Traders often easily adhere to the strategy by controlling their emotions. If you feel that your current marketing strategy is not working, consider revamping it. Under these circumstances, it would be wiser for small companies to focus on product packaging, marketing campaign, and public image because it has the potential to be as effective as low prices. It will help you analyze and understand your message and how to effectively reach a larger pool of prospective customers. Economic Advantages Definitely, its a responsible call, but market penetration can bring cost advantages if your business development goes the way you predicted and hoped. Determine the total cost. Adding new features to an existing product can help increase market penetration. Selecting the right media platform to launch your campaign is the key to the success of your campaign. They also need to research the competition and find ways to differentiate their products or services. Belfast BT2 7ES and market development strategy (luxury vehicles and ride-sharing). The bank licenses other financial companies to create unique products for their customers for example, savings accounts, loans and debit cards. ), market development strategy (i.e. This is because it requires less investment and can be done quickly. Do you have a bandwidth tool or a team that could measure the performance of the market development strategy? For example, one of the way to distribute information is through email marketing. As long as, people stay on the platform, the company earns money by running ads. While market penetration is the lowest risk growth strategy, market development is a close second because unlike product development and diversification these two strategies dont include the extremely high risk nature of developing and selling a new product. The company has made significant growth for the last 10 years. Working with resellers is a great way to increase market penetration. Opinions expressed are those of the author. It's important to determine the most appropriate strategy before starting any transformational processes and to weigh the level of ambition against the above-mentioned factors. This is how you help your customers understand why your product is better than a competitor's product, and why they should shop with you not someone else. Building a brand is a crucial part of marketing. You must have JavaScript enabled to use this form. This is where market development comes in as a beneficial strategy. It helps you to focus on various elements and factors that would impact your entire marketing strategy. Nowadays, traditional banks often choose to provide their own back offices. It is the successful selling of a product or service in a given market. Businesses can use a variety of ways to evaluate the degree of competition in their sector. My company conducted a small survey about investments in bank digitization that found that banks have to invest 10% of their annual expenses for a period of one to three years. Therefore, you should implement this strategy in such a way that best suits your business operations and product and service. The market strategic campaign allows you to promote your business and spread your brand awareness. Some of the cons and advantages of marketing strategy are as follows; Developing an effective and actionable market strategy requires significant customer market research, data, competitor analysis, KPIs, metrics, and various indicators to understand the customers and market. Air India to discontinue Vistara after merger, DS Group Partners with Lderach (Swiss Chocolate Maker), Castrols unveils a New Logo and a Refreshed Brand Identity, Increasing marketing and advertising efforts. The key is to understand when to use each one. This could involve developing a new product or improving an existing one. Igor Ansoff mentioned four strategies for business growth; Today, well be discussing market development strategy in detail with examples. Creation Of A Service Based On The BaaS Model. It amplifies the probability of sales, growth, and success of your business in the long term. For example, before implementing a market development strategy, you might want to: Competition is fierce, no matter which business youre in. Fast Growth If your business and marketing objective is to enlarge your consumer base, then market penetration is the most effective way to act. Social media and digital marketing campaigns allow you to precisely target your customer market. Furthermore, the competitor that was first to lower prices, will have to continue doing the same in order to maintain its market leadership. The goal is to find out the new interested customers in the current market. If youre not sure how often to calculate market penetration, consider doing it after every marketing and sales campaign. Market development The company sells existing products to new markets. You cant run the same advertisement campaign across the world due to cultural differences. There is a growing embrace of niche ecosystems when a bank focuses on meeting customer needs in a certain area. But when you have a product/service and ready to grow your business you might use various strategies for the growth and development of your business. For instance, you cant market pork and pig meat in Muslim countries. Its critical to check your market penetration regularly to detect any changes. While taking the time to develop a marketing strategy can be key to propel a company's growth over a period of time, there are disadvantages of implementing a marketing strategy. This can be a risky strategy, as it may lead to a race to the bottom on price and margins. Buyers always want better and when the opportunity comes, they always shift towards the best. However, in the future, traditional banks will probably try to catch up with BaaS companies by integrating directly with fintechs without intermediaries. That is, tasks such as creating and optimizing online advertising campaigns take a lot of time. This is usually accomplished through recommendations and by social media networks such as Facebook and Twitter. To calculate market penetration, you need to know two things: 1) the size of your target market, and 2) how many people in that target market have purchased your product or service. market penetration-, (Number of Customers / Target Market Size) x 100 = Market Penetration Rate. Uber is an online ride-sharing platform. It allows them to precisely target their audience based on their needs and interests. While the demand is increasing, the organization saves money on product creation costs due to the greater volume of production. The platform follows the market development strategy. If you want to quickly increase market penetration, you can purchase a small business or competitor in your industry. Market penetration also helps to create goodwill for a company. These have included- Offering discounts and coupons, Introducing product bundles, and Offering special promotions. 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. It is important to do your research to make sure you are entering a new market wisely, and also to have a solid plan for how you will penetrate that market. If competitors sell similar products and one of them decides to lower prices, its natural that others will try to match them to create a balance and avoid consumer shifting. For a better understanding, if the large number of your customer base becomes familiar with the cheap product, its highly possible that everyone will forget that the firm also produces luxury items. Market development strategy helps companies and businesses to approach new customers in a properly planned way. Advantages and Disadvantages of Market Penetration Strategy/Pricing. When you have got biased data from your research, then you cant make the right decisions. Ansoff proposed that the four basic growth alternatives he identified could be defined using a 22 matrix (known as the Ansoff Matrix) made up of new and existing products on one axis, and new and existing markets on the other. You realize various new uses of your products and then promote them among the customers of your existing market. I've seen this strategy applied by banks around the world. Though you may have an innovative idea and a capable team to execute, there's no guarantee of success. As long as your product is comparable in value to your competitors, then pricing may be an easy way to stay competitive. Improving Products The best practice of engaging and interacting with customers is to inform them that your product has changed to better. If you thought this was useful, youll love getting Lighter Capital's thoughtfully curated monthly e-newsletter. Fixed costs don't change with the number of units you produce, whereas variable costs do. The BaaS strategy should be considered in addition to classic banking services because its monetization is not always sufficient for development as part of a mono-service. The bank provides financial companies with its technology platform through the API layer. Creating a marketing strategy will allow you to take a step back for a moment. I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. In many cases, if the marketing strategy has more advantages than disadvantages, this strategy could be implemented. While creating a marketing strategy for your company can provide you with a variety of critical and insightful information, it's only helpful if your analysis is done properly and thoroughly. Fixed costs include leasing or rental costs, insurance or interest payments. Whether you choose to develop a marketing strategy or not, go into the decision with your eyes open. Market development is a growth strategy that involves selling your existing products or services to a new group of customers. It begins with market research where you: A segment is simply a smaller sub-group of a larger population. Market penetration can also help to improve a companys prospects. 0800 181 4422. Increased Promotion Investing more time and strength in a promotion can dramatically increase market penetration. A market development strategy is a business growth strategy that focuses on introducing existing products to new markets. When you offer better prices than your competitors, luring out their customers becomes easier that previously expected. Digital market entry is the sweet spot of our firm. The NBA invested significant resources and years of negotiations to lay the foundation for bringing the NBA to China, and in 2008 their hard work paid off. 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