- If your current market is flattening out or sales are stagnant, then it is imperative to plan and implement a growth and expansion strategy. Examine your existing sector – can it be enlarged? How about developing into new markets?
The decision to develop a new product or service can be difficult. Before starting, keep these in mind:
- The Target Market – is there a new or complimentary target market to aim for? Alternatively, is there another way to reach a greater proportion of your current sector?
- Customer Profile – has your customer profile changed? Are their needs different or do they consume information through different channels?
- Market size & location – check the information to decide if these markets are suitable in size and geographical location.
- Market Analysis – Make sure you’ve researched the marketability of a product / service in your target area.
Resource can be wasted without a systematic approach, so examine these three steps:
Step 1: Define Your New Target Market
The first item is the demographic and the geographic location of the new market.
a/. If the plan is to sell to your current target group, then you will already have a detailed profile of typical customers. However your customers’ needs may have changed over time. Think about what matters to them in the current socioeconomic climate and consider upgrading your products or diversifying in to complimentary products to satisfy their needs.
b/. If a completely new group is targeted, a basic profile of these potential clients needs to be developed. The greater the knowledge of the customers, the easier it is to develop a suitable marketing strategy. Here’s how to get a clearer picture.
Analyse your customer.
Items to check include type of business, how long established, number of employees, annual turnover, location, organizational structure, products or services and purchasing decision-makers.
Analyse the customer’s needs and how they can be met.
This may include special needs such as a bespoke service or product, future needs including new technologies or policies. Work out why the new customer will buy your product and how your product differs from your competitor’s.
Step 2: Do Your Market Research
Once the customer profile and extent of the new market is completed, then basic market research can be done to find:
a/. Interest in your product or service – It’s important to gauge if there’s any need for your product, who currently uses your product and how much they might be willing to pay for it.
b/. How to get your product / service to your customers – This is especially important if the new market exists in a different geographical area. Does it make logistic sense to operate there? Is a local service more important to customers?
c/. Competitors in the target area – How do you stack up against your competitors? Can you exploit any of their weaknesses and eat into their market share? Equally, what can you learn from their successes?
Step 3: Enter the Target Market
The last step is to develop and implement a good strategic plan for promoting and delivering to that market with three key areas:
- Promoting your products or services. Develop a marketing plan on how to introduce and promote your products / services. This plan should include any media and marketing channels, point of purchase, mailing, telemarketing or other advertising planned. If a sales force is involved, sales strategies must be developed with any necessary promotional tools.
- Delivering your products / services to the customer. Supply and distribution are important especially with your suppliers, who will need to be involved in the planning.
- Cultivating market share and sustaining business through customer satisfaction. As new clients are established in the area, focus on meeting their needs. Conduct customer surveys to establish what they like and dislike about your company.
Finally, qualify success by applying standard business measures to the venture. Track sales, market share, profit & loss and other key measures. Learn from this expansion project so you can translate what has been learned into future business activity.