New Market Development PDF

New market Development Lesson 1: Definition of Market development Market Development is a 2-step process to tap the untapped market. It begins with market research wherein a company does a segmentation analysis and short lists market segments which are worth pursuing. It is an attempt to use the e...

New market Development Lesson 1: Definition of Market development Market Development is a 2-step process to tap the untapped market. It begins with market research wherein a company does a segmentation analysis and short lists market segments which are worth pursuing. It is an attempt to use the existing product or service to attract new customers. The goal is to expand the reach or tap into a different segment or unexplored market. A segment is defined as the small sub-group of a larger population. For example, the marketing team of the company can divide the market based on geography, demographics as well as income levels etc. Once the company decides which segment to choose, the next step of market development involves creating a promotional strategy to enter into the market. For that, companies may have to take the support of both audio and visual media to push the product deeper into the market. Market development is a marketing strategy in which a company tries to sell an existing product to a new group of consumers. -is a strategic step taken by a company to develop the existing market rather than looking for a new market. The company looks for new buyers to pitch the product to a different segment of consumers in an effort to increase sales. When we say about segmentation analysis - It's about dividing broad target markets into subsets of consumers with similar wants and needs. Segmentation analysis helps a company to understand its customers' demographics and their motivations for buying particular products. Lesson 2: New Market Development Another aspect is the pricing of the product. If there are competitors in the market, you may have to price the product accordingly or come out with a product which belongs to the same segment but differs in features, quality etc. to command higher pricing. To counter competition, the marketing team could look at the penetration pricing where you can aggressively price the product below competitors product to gain market share. The major challenge faced by firms, which want to indulge in market development, is that it is a costly affair. It requires huge capital investment to keep the project going. If the investment in the new segment doesn’t pay off as desired, then the whole exercise turns out to be worthless. Market Development – Strategies, Advantages and Examples Market development is a growth strategy that identifies and develops new market segments for current products. A market development strategy deals with growing the prospective market through new users or new uses. New users can be segmented as new psychographic segments, new institutional segments new demographic sections, or new geographic sections. Sales can be increased via new ways of making use of the product. Innovation isn’t continuous in high tech. For a market development strategy to be successful, it needs to bridge the gap between the mainstream and the early market An existing market is a market where customers already spend money buying more or less the same product or service that a given company is selling. That product or service may be delivered or sold in a different way, but at the end of the day, the customer that you’re targeting is already spending money on substantially the same thing. What’s an example of this? Trivago is an online marketplace to find hotels and accommodation around the world. People already spend money on hotel bookings, Trivago is just helping them to find hotels more easily. This is an existing market. Chewy.com is an e-commerce company for pet food. Their target customers already spend money on pet food. Again, an existing market. Amazon started out selling books, which people already buy. Uber and Grab started out replacing taxi services, which people already buy. These are all existing markets. A new market is a market where the end product or service is new – in other words there isn’t really existing demand, but there could be. SpaceX – space travel is a new market for certain. When Google first came out, it was targeting a new market of online search and search engine marketing. There really wasn’t much of an existing market in search at that time, outside of maybe Yahoo and Altavista. Everything related to drones is a new market. Market Development is one of the four main growth strategies defined by Igor Ansoff in the Ansoff Matrix: These four growth strategies were identified by Ansoff using a 2×2 matrix (known as the Ansoff Matrix) and was made up of new or existing products on one axis and new and existing markets on the other. The Ansoff matrix is a tool for strategic planning which is commonly used. The matric aids companies in the implementation and planning a strategy for growth that is efficient. Market Development Strategy Having customers divided into different segments. Industrial buyers need to be looped in for goods that were made only for households. New regions and areas within a country can be tapped. Foreign markets can be explored. The firm has an innovative product technology which can be used in the new market. Economies of scale will kick in when the output grows. Newmarket is more or less the same as the previous one. The buyers in the market are profitable by nature. Market Development Strategies Market Development Strategies consist of the following: Dealing with a new customer segment(non-users). There are many ways to achieve this. Some of these are advertising, cold outreach, free trials, and other strategies. Increase sales through new ways of using a product. News ways of using a product can be discovered. This allows one to promote to new customers. It allows a business to grow into unexplored markets. Growing into a new domestic market or regional expansion. Say a firm is functioning in Dubai. It needs to ask whether it should tap into consumers from Abu Dhabi as well. Expanding in a foreign market or global expansion. WHAT YOU SHOULD KNOW BEFORE GETTING STARTED The decision to develop a new product can mark the beginning of an extremely difficult process for many businesses. Because every business differs in regard to products or services it offers, the information in this Business Builder is designed to be as broadreaching as possible so that it may be adapted to a variety of situations. Applying the information in this Business Builder to your business will help you become more adept at expanding your business into new markets. This Business Builder was developed to help you expand the market for your established products or services. Another method of market expansion involves developing new products that you will introduce to the same or new markets. The Business Builder "How to Expand Your Business Through New Product Development" provides information on how to grow your business by developing new products. Following are a few things to keep in mind before you get started: Target Market is the customer group that you feel will most likely want to buy your products or services. This group is defined by your customer profile. Customer Profile is a detailed profile of your typical customer. For individual consumers, it includes information such as age, income, gender, marital status, profession and buying habits. For businesses, it includes the types of business, number of years in business, number of employees, annual revenues and products or services sold. Demographics are the characteristics of a population such as size, growth, age, income, gender, marital status and buying habits. This information helps you decide whether this target market is large enough for your products or services in the target area. Market Analysis is an analysis of research data that results in determinations about the marketability of a product or service in the given market. A systematic approach is the best way to find a new market. Without it, you can waste a lot of precious resources — something a small business does not have an excess of. The following steps will effectively and efficiently guide you through the new market development process: Define Your New Target Market(s) Do Your Market Research Decide To Enter This Market Or Look For Another Enter The Target Market Promoting your products or services. Develop a marketing plan that details how you will introduce and promote your products or services to the new target market. This plan should include any media, point of purchase, mailing, telemarketing or other advertising you plan to use. Delivering your products or services to the customer Supply and distribution are the logistics of doing business. If you are in retail and you are moving into a new geographic area, then you will need to find a good location for your new store. You will also have to establish a method of supplying the new store with products...For example: Milktea Hauzr established a contract with delivery services like toktok ,lalamove, grab,or the like to provide delivery service for its mail order products. How will you get your products and services conveniently to your customers? What are the logistics for distribution? How are your competitors currently getting their products to customers? Is there any potential to establish a competitive advantage here? Considering all this, outline your distribution plan. Cultivating new market share and sustaining current business through customer satisfaction As you begin to establish new customers in the target area, you must remember to stay focused on meeting their needs. It is much easier to lose customers than it is to gain them. Conduct customer surveys to find out what your customers like and dislike about your products. Talk to them personally and ask them what they think. If your business is driven by a desire to meet your customers’ needs, then you will always be successful in new, as well as established markets.For information on surveys and other assessments, you may want to refer to the Business Builder How to Create a Customer Service Plan. Now, outline your customer service plan. How will you determine customers’ ongoing needs? Will you use surveys, interviews? Will you rely on referrals to increase your customer base? NEXT STEPS. Finally, measure your success by applying standard business measures to your expansion venture. You should be tracking your sales, market share, profit and loss, and all other key measures that apply to your business. Use this information along with customer and employee feedback to design and implement better ways of doing business. Learn from your expansion efforts so that as you continue to grow your business by establishing new markets, you can translate what you have learned into good business decisions. As mentioned earlier in this Business Builder, markets constantly change. If you are aware of this, and you structure your business to be dynamic, adaptable, and growth-oriented, then you will be successful. ASSESSMENTS When you have completed this Business Builder, you should have a general understanding of the following key elements: The process for thoroughly defining a new target market. The process for developing a profile of the target customer. Market research, including a sense of the information needed for good market research, and where to go for market research information. Market analysis its purpose and expected outcomes. The overall process of expanding your business into a new market WHO IS YOUR CUSTOMER Know your market and your potential buyers/clients WHAT IS CONSUMER BEHAVIOR Actions and the decision-making process of people who purchase goods and services WHAT DOES THE STUDY OF CONSUMER BEHAVIOR INCLUDE? -Actions that drive consumers to buy certain products -Influence of the Environment WHY IS IT IMPORTANT FOR MARKETS TO STUDY CONSUMER BEHAVIOR? To understand the expectation of consumers To learn what influences consumers buying decision To design marketing mix strategies Note: 76% of Consumer expect companies to understand their needs and expectations WHAT ARE THE BENEFITS OF STUDYING CONSUMER BEHAVIOR Consumer Differentiation To tailor or customized products for different customers groups Retention of Consumers To convince the customers to buy the products repeatedly Designing Marketing Program To design campaign with the product, price and promotion decisions Predicting Market Trends\ To study continuous response pattern To predict changes in the market place Understanding Competition To offer competitive products based on expectations Innovating New Products To develop the best fit product Staying relevant in the Market To enable to see ,seize and shift ahead in the market Improving Customer service To understand the differences within the customer base. To provide appropriate service for individuals CONSUMER BEHAVIOR EXPALINS WHY PEOPLE BUY WHAT THEY BUY  Marketers study consumer behaviour to create and market products effectively The more data you gathered the better your decisions become What Is the Role of Consumer Behavior in Marketing? As addressed above, the organizations that not only solve, but best communicate that they solve, real consumer problems are the ones that win in the market today. Therefore, consumer behavior insights can be used to inform almost all areas of your marketing strategy. This may include what content you should be creating within your blogs and other content mediums, the types of stories you tell in your video and display advertisements, or even how you adjust your product lines to deliver what the consumer wants. As an example, let's consider the content your marketing teams could create in the coming months. If you're a brand that specializes in products for men, you might have a plan to create a bunch of blogs about gifting for men this quarter. When analyzing consumer search behavior, you may notice that the phrase “gifts for men on anniversary” gets a substantially more searches than “ideas for husband anniversary gift”. This subtle tweak in the way you title and keyword optimize your content could mean the difference between getting almost 10,000 site visitors or just above 1,000 from this content. Sources of Consumer Behavior Data for Marketers Consumer behavior insights can be derived through a variety of ways. They may come from analytics provided by your marketing or sales platforms, they may be a result of surveys, or they may come from your own analysis of publicly available data (such as search engine data). The more you understand your ideal customer, the better you can tweak your marketing efforts to woo those individuals. As the world becomes overwhelmingly digitally driven. Many, but not all, components of consumer behavior can be captured by the analytics provided within the marketing channels your company already uses. These may include your programmatic display advertisements, search ads, and website content. In these cases, clickthrough rates, page views, and site conversion activity can tell you a lot about what consumers do and don't like, what marketing content works, and what doesn't. But there's a large amount of consumer behavior data that is outside of a marketers' readily-accessible view. Such as how consumers are engaging with competitors' websites - and how those sites' content influences consumer behavior inturn. Analytics solutions that leverage competitive intelligence in combination with search behavior data have the ability to guide marketing strategies in a variety of ways. To conclude, marketers who leverage the power of consumer behavior data automatically take giant steps forward in their race against competitors to reach their audience. If consumer behavior is currently driving your marketing strategy, you may be missing out on important marketing opportunities right in front of you. Understanding consumer behavior is a broad and complicated task, but with the right research mix you can begin to get a detailed understanding of your customers and their motivations. INNOVATION IN THE NEW MARKET DEVELOPMENT- Ashley Jade B. Baylon Innovation is everywhere. It is redefining the way in which we think, how we work, the channels we use to buy goods and services and the way in which we engage and communicate with others. Knowing how to go about taking your ideas and concepts and turning them into reality requires a unique set of skills. Partnering with an expert who understand your vision; can assist you to design, test, commercialize and refine new products or services; and can apply the right level of rigor and diligence is the key to success. SOURCES OF INNOVATION OPPORTUNITY- Rovy D. Panganiban The seven sources of innovation refer to various avenues or channels from which innovation can originate. These sources include technology, market needs, research and development, collaboration and partnerships, and consumer behavior and trends. THE 7 Sources of Innovation Opportunity THE UNEXPECTED THE INCONGRUITY PROCESS NEED INDUSTRY AND MARKET STRUCTURE CHANGE DEMOGRAPHICS CHANGES IN PERCEPTION, MEANING, AND MOOD TYPES OF INNOVATION- Eden Grace A. Baclas, Jorlyn D. Bercadez, Gayla Santiago Disruptive innovation- is a concept introduced by professor, academic and business consultant Clayton Christensen first in an HBR Article and later in his book called innovation. Product innovation- is probably the most common form of innovation and it refers to improvements in performance characteristics and attributes of the product. It can also use components that differ from previously manufactured products. Product innovations are always tangible, can involve radically new technologies or can be built based on combining existing technologies in a new way, although they don’t necessarily have to involve any technology at all. Service innovation- refers to a new or significantly improved service concept, product or process in a new or existing market. It can be for example a new customer interaction or distribution channel, a system that improves the delivery process or new solutions in the customer interface. The way you serve your customers is a great way to differentiate, generate more value for them and deliver more revenue for your organization. A big part of a successful business is the ability to make your customers lives easier and the better you’re able to meet the needs and expectations of the ones you serve, the brighter your future looks like.  Process innovation- A process combines the skills, technologies and structures that are used to produce products or provide services. Process innovation generally refers to the implementation of a new or significantly improved production or delivery method. It may also be indirectly related to the company’s products and services, for example in the form of support function processes in HR or finance. Incremental innovation- Most innovations are incremental, gradual and continuous improvements in the existing concepts, products or services in the existing market. Incremental innovation- are just a little better than the previous version of the product or service and has only slight variations on an existing product formulation or service delivery method. Technological-technology as a source of innovation can be identified as a critical success factor for increased market competitiveness. Technological innovation involves new or improved technology, such as new type of machinery or alteration of some form of technology into a product, processes or service delivery methods. Social-are new practices or technological inventions that aim to meet social needs in a better way than the existing solutions. These types of innovative solutions can be provided or funded either by public or commercial entities. Sustaining innovation- is the opposite of disruptive innovation as it exists in the current market and instead of creating new value networks, it improves and grows the existing ones by satisfying the needs of a customer. Radical innovation- is rare as it has similar characteristics to disruptive innovation but is different in a way that it simultaneously uses revolutionary technology and a new business model. Architectural innovation- is a concept introduced by a Harvard Business School professor Rebecca Henderson and dean Kim Clark back in 1990. Architectural innovation is described as the reconfiguration of existing product technologies that creates an improvement in the ways in which components, some of which are not necessarily innovative together, are combined. For an innovation to be successful, people need to be able to find it and then benefit from it. The main purpose of a marketing innovation is to open up new markets or increase market share Business Model Innovation- In all its simplicity, the business model is how a company functions and earns money. It consists of core values and resources, strategy, core channels and target customers, to name a few. Pros and Cons of MOVERSE- Marjorie B. Caballero, Ma. Victoria L. Bonganay PROS: Time-Saving Expertise Reduced Stress CONS: Cost Control Less flexibility Moving yourself typically will cost less monetarily, but you also have to consider the cost of your time, your stress levels, and the risk of potential damage. Here are some pros and cons of self-moving. Pros of self-moving: Cost Control Less flexibility Cons of self-moving: Time-consuming Risk of improper packing and loading leading to damaged items Product Market Structure The structure of a product market is a fundamental concept in economics that describes how different companies and products interact within a given marketplace. Understanding market structure helps businesses make strategic decisions about pricing, production, and competition. This report will focus on three main areas: market structure, types of market competition, and new product development with its stages and strategies. Market Structure Market structure, in economics, refers to how different industries are classified and differentiated based on their degree and nature of competition for goods and services. It is based on the characteristics that influence the behavior and outcomes of companies working in a specific market. Market structures show the relations between sellers and other sellers, sellers to buyers, or more. Types of Market Structure 1.Perfect Competition In this market, many small firms sell identical products. Each firm is a price taker, meaning they cannot influence market prices. Entry and exit from the market are easy. Example: Agricultural products such as wheat or corn, where numerous farmers offer identical produce. 2. Monopolistic Competition This structure features many firms selling differentiated products. Companies can influence prices to some extent due to product differentiation. However, there are still many competitors. Example: The fast-food industry, where various brands sell similar products (like burgers) but differentiate themselves through branding or slight product variations. 3. Oligopoly In an oligopoly, a few large firms dominate the market. These companies have considerable control over pricing, and the market is characterized by interdependence, where firms watch each other closely and react to competitive moves. Example: The automobile industry, where a few large companies (such as Ford, Toyota, and Volkswagen) dominate the market. 4. Monopoly In a monopoly, a single firm controls the entire market, faces no competition, and has significant control over pricing. Monopolies often arise when a company has exclusive access to a particular resource or technology, or when government regulation prevents others from entering the market. Example: Local utility companies such as electricity or water providers. Types of Market Competition Market competition is the rivalry among sellers to attract customers while maximizing their profits. There are several types of market competition, which vary based on market structure: 1. Price Competition In markets where products are largely similar, firms compete primarily on price. Consumers are highly sensitive to price changes, and businesses that can offer lower prices often gain market share. Example: Retail chains like Walmart compete with other retailers by offering lower prices. 2. Non-Price Competition In industries where products are differentiated, firms compete based on factors other than price, such as branding, quality, and customer service. Example: Apple differentiates its products through innovation and premium branding, which allows it to charge higher prices than competitors. 3. Direct Competition This occurs when companies sell similar products or services and target the same customer base. Example: Coca-Cola and PepsiCo are direct competitors in the soft drink industry. 4. Indirect Competition This refers to competition between companies that do not sell the same product but are in the same category. Example: A movie theater competes indirectly with other forms of entertainment like streaming services, restaurants, or amusement parks, as they all vie for consumers' discretionary spending. 5. Monopolistic Competition In monopolistic competition, firms compete by creating unique products or offering different versions of a product. Example: Cosmetic companies often release new lines that differ in ingredients or branding but cater to the same core need (beauty). New Product Development: Stages and Strategies New product development (NPD) is a crucial process for businesses looking to grow and maintain their competitiveness. The NPD process involves multiple stages and strategies that can help a company innovate, create, and bring new products to market successfully. Stages of New Product Development 1. Idea Generation In this stage, businesses gather ideas from various sources, such as customers, competitors, and employees. The aim is to identify a broad range of potential product ideas. Example: Crowdsourcing ideas from customers or monitoring trends in the market. 2. Idea Screening  Once ideas are generated, they must be screened to identify the most viable ones. This involves evaluating the potential profitability, feasibility, and market demand for each idea. Example: A company like Google may screen ideas to focus only on innovative and scalable technologies. 3. Concept Development and Testing In this stage, selected ideas are developed into product concepts and tested with potential customers to gauge their interest and gather feedback. Example: Testing a new smartphone concept with a focus group to gather insights on its features and usability. 4. Business Analysis This stage involves analyzing the financial viability of the product idea. The business will forecast the potential costs, sales, and profits associated with bringing the product to market. Example: Conducting a cost-benefit analysis of producing an electric vehicle by a car manufacturer. 5. Product Development If the business analysis proves favorable, the company proceeds to develop a prototype or sample of the product. This involves design, engineering, and refinement based on feedback. Example: A tech company might create several prototypes of a new smartwatch to test functionality. 6. Test Marketing Before launching the product on a large scale, companies often release it in a limited market to test its performance and gather feedback. Example: Launching a new fast-food item in select locations to measure consumer reactions. 7. Commercialization This is the final stage where the product is officially launched to the market. Companies also decide on marketing strategies, pricing, and distribution channels. Example: A global product launch of a new smartphone with marketing campaigns across various media channels. Strategies for New Product Development 1. Market Penetration Involves focusing on increasing sales of existing products in current markets through marketing strategies like promotions and price discounts. Example: Coca-Cola often uses promotional offers to increase the consumption of its beverages. 2. Product Development This strategy involves creating new products for existing markets. Companies innovate by upgrading their product lines or adding new features. Example: Samsung consistently develops new models of smartphones to cater to its existing customer base. 3. Market Development This strategy entails taking existing products to new markets. It can involve geographic expansion or targeting a new demographic. Example: Tesla expanding its electric vehicles to international markets like Europe and China. 4. Diversification This is a high-risk strategy that involves creating new products for new markets. It often requires a company to enter a completely new industry. Example: Amazon started as an online bookseller but diversified into other markets like cloud computing (Amazon Web Services). Development services Development services encompass a broad range of activities and expertise that support the creation, improvement, and implementation of various projects, systems, and solutions. These services are essential for businesses, organizations, and individuals seeking to achieve specific goals through technological innovation, process optimization, or strategic growth. Services development products Is a series of steps that includes the conceptualization, design, development and marketing of newly created or rebranded goods and services. Product development includes a product’s entire journey, from the initial idea to its market release and later. Process development Process that involves identifying and tapping into previously unexplored customer segments or geographic areas for existing products or services. This strategy aims to expand a company’s customer base, increase sales, and achieve growth. The process typically involves several key steps: Market Research and Analysis Develop a Marketing Plan Modify Products or Services Establish Distribution Channels Market Entry Strategies Services bundle development Service bundle development in a new market is a crucial strategy for businesses looking to expand their reach and appeal to a wider customer base. It involves creating packages of complementary services that address the specific needs and preferences of the new market. This approach can be highly effective in attracting new customers, increasing revenue, and establishing a strong foothold in the new market. A service bundle is a collection of related services offered together at a discounted price compared to purchasing each service individually. This strategy is commonly employed across various industries, from automotive mechanics offering maintenance bundles to spas providing packages for beauty and wellness services. The Benefits for business: Increased Average Order Value: Customers purchasing a bundled service typically spend more upfront than if they were to buy individual services, leading to a higher average order value and increased revenue. Reduced Sales Costs: Selling bundled services requires less sales time and resources, as the sales process is streamlined. This allows businesses to allocate resources to other areas of their operations.  Enhanced Customer Loyalty: Offering bundled service packages to existing customers can boost their satisfaction and encourage repeat business. Improved Market Penetration: Bundles can attract new customers who might not be interested in individual services but find the value proposition of a package appealing. Increased Brand Value: Offering comprehensive service bundles can position a business as a one-stop shop, enhancing its brand value and reputation. Approaches in the development of a new product A process that combine to create and launch a new product to market. Unlike regular product development, new product development is specifically about developing a brand new idea and seeing it through the entire product development process—culminating in a new product. In today’s competitive market, the ability to offer products that meet customers’ needs and expectations has never been more important. What is new product development New product development refers to the complete process of bringing a new product to market. This can apply to developing an entirely new product, improving an existing one to keep it attractive and competitive, or introducing an old product to a new market. The emergence of NPD Is driven by the need of companies to maintain a competitive advantage in the market by introducing new products or innovating existing ones. While regular product development refers to building a product that already has a proof of concept, new product development focuses on developing an entirely new idea—from idea generation to development to launch. New development products that helps you Stay updated with new technology and trends Beat the competition with creative solutions Offer more products and find new streams of revenue Adapt to changing customer needs Use resources more efficiently Improve your brand’s image Grow your business and ensure sustainability