Assess your options for business growth

Market development strategy involves selling your existing products or services to a new customer group. It begins with market research where you:

• segment your current market
• target promising segments (new groups of customers)

To identify a target market segment, look at factors like:

• new geographical areas
• new demographic segments
• new customer needs
• customer preferences, interests and lifestyle

Consider customers typically served by your competitors, or customers currently not served by anyone. Once you identify your target segment, create a promotional strategy and find ways to attract them.

Common market development strategies

Key market development strategies you could consider include:

• pricing - offer competitive prices with offers and discounts, or higher value to justify premium price
• distribution - add new channels to reach target customers, eg sell online if you currently only have a 'brick and mortar' shop
• branding - create a new brand for products aiming to reach a target market or a specific customer segment
• promotion - tailor promotional messages to entice customers with offers, vouchers, loyalty schemes, etc
• sales - target a different demographic segment or type of customer to create new leads and opportunities
• product development - adapt an existing product or develop a new one for the untapped market

See more on product development strategy.

As well as attracting new customers, market development also involves encouraging current customers to use your product in new ways to boost sales.

Market development vs market penetration

The key difference between market development and market penetration is that market development strives to increase market potential. It does this by expanding into untapped market segments. With market penetration, the market size is fixed so the strategy focuses on maximising the potential of an already existing marketplace.

See more on market penetration strategy and other business growth strategies.