Discuss the Three Types of Market Development Strategies and Give

question 71

Essay

Discuss the three types of market development strategies and give examples of each.
A.New geographical market - This simply refers to selling the existing product in new locations.For example,a firm selling its products in Singapore could start selling its products in Malaysia,Thailand,and IndonesiA.This has the potential of increasing sales by offering products to customers who have not previously had the chance to purchase them.The entrepreneur must be aware of possible regional differences in customer preferences,language,and legal requirements that may necessitate a slight change in the product (or packaging).
B.New demographic market - Demographics are used to characterize (potential)customers based upon their income;where they live;their education,age,and sex;and so on.For an entrepreneur that is currently selling the firm's existing product to a specific demographic group,the business could grow by offering the same product to a different demographic group.For example,a studio currently produces and sells computer games (specializing in games on baseball and soccer)to males between the ages of 13 and 17.However,there is an opportunity for this company to expand its sales by also targeting males between the ages of 24 and 32 who are university educated,have high disposable incomes,and would likely enjoy the escapism of these computer game products.
C.New product use - An entrepreneurial firm might find out that people use its product in a way that was not intended or expected.This new knowledge of product use provides insight into how the product may be valuable to new groups of buyers.For example,when I moved from Australia to Chicago,I bought a baseball bat.I did not use the bat to play baseball;rather I kept it beside my bed for security against anyone who might break into my apartment.Another example is four-wheel-drive vehicles.The original producers of this product thought that it would be used primarily for off-road recreational driving but found that the vehicle was also popular among housewives because it was big enough to take the children to school and carry all their bags and sporting equipment.Knowledge of this new use allowed the producers to modify their product slightly to better satisfy customers who use the product in this way.An advantage from using a market development strategy is that it capitalizes on existing knowledge and expertise in a particular technology and production process.

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Definitions:

Fast Fashion

The rapid translation of high-fashion design trends by lower-cost manufacturer-retailers.

Online Retailing

B2C electronic commerce in which individual consumers directly buy goods or services over the Internet; also known as e-retailing.

E-Retailing

The selling of goods and services through online platforms, also known as electronic retailing, encompassing a wide range of online business models.

Cyber-Retailing

The activity of selling products or services through electronic means, such as the internet, rather than through a physical retail store.