Your business is getting by just fine – but still, the questions remain: Could you be selling more? Is there an opportunity to increase market share? Is there any way you could further your product diversification efforts?
Companies hoping to increase revenue can do so in a variety of ways — such as increasing their advertising budget, expanding their sales teams, and investing heavily in product development.
However, one of the often overlooked ways to strengthen your gross sales is a purposeful, well-researched, and expertly executed market development strategy.
In this article, we’ll explain what market development is and how you can employ it to increase sales and grow your business. Then, we’ll take a look at some examples of market development strategies that work for top businesses today.
What is market development?
Market development is the expansion of your total addressable market (TAM) and how much market share you can expect to claim. The Ansoff Matrix (or Product/Market Expansion Grid) illustrates how a company might expand its TAM across four categories: market penetration, market development, product development, and diversification.
Each category rests upon two axes — one for market and one for risk. A company can expand its efforts into new or existing markets and each poses more or less risk to the business.
When businesses want to expand within their existing markets with low risk, they might attempt a market penetration strategy. In this scenario, TAM increases because by offering a new product or service, a business can effectively increase the maximum amount of revenue it can possibly attain from its existing customer base. A product launch is an effective way to execute this strategy.
- Product Launches — A company may release new iterations of a product they already sell successfully within the market. The purpose of launching a new product is to generate excitement and buzz around the brand to increase sales.