Market development is essential for companies looking to maintain long-term growth. Jollibee, the Filipino fast-food giant, is the prime example of successful market development. After dominating the Philippines market, Jollibee expanded aggressively into the U.S., the Middle East, and other Asian countries, targeting overseas Filipinos and eventually local customers. Jollibee grew its global presence by adjusting its menu and branding to suit international tastes while retaining its unique identity.

Whether you’re a startup or an established brand, market development opens new opportunities by leveraging existing products in new markets. Let’s explore market development and how your company can utilize this strategy.

What is Market Development?

Market development, also known as market expansion, is a business growth strategy in which a company introduces its existing products or services into new markets or new customer segments. A market development plan can involve selling in new geographic areas, targeting different customer demographics, or introducing new use cases for existing products.

Market development has several advantages, including access to new customers and increasing brand awareness. However, it also has several disadvantages, including high costs and resource demands, increased competition, and poor understanding of the new markets. The goal is to expand the customer base and generate new revenue sources without changing the current product. 

Market Penetration vs Market Development: What are Their Differences?

Both market penetration and development are part of business growth strategies with different approaches. Market penetration focuses on increasing sales of existing products within the existing market. The goal is to gain a larger market share from customers familiar with the product. It involves pricing adjustments, promotions, increasing marketing efforts, and improving product availability or customer incentives. For example, a company introduces loyalty programs to increase sales among current customers.

Market development focuses more on finding new markets for an existing product. This means reaching new customer segments or geographic regions where the product hasn’t been sold before. It involves identifying and adapting to new market needs, sometimes with changes in marketing, distribution, or product positioning. For example, a company may expand its sales into a new country.

Why is Market Development Important?

Market development is an essential move for businesses looking to boost their growth. Several reasons why market development is important are:

Diversification of Customer Base and Revenue Streams

Developing into new markets allows businesses to expand their customer base and revenue streams from untapped customer segments. This will reduce dependence on a single customer group or geographic region, making businesses more resilient as opportunities in other markets balance downturns or risks in one market. 

Enhancing Brand Recognition

Introducing existing products to new customers will enhance brand visibility. As awareness grows among a wider group of customers, the company’s reputation and credibility are reinforced, making it easier to gain trust and loyalty in both established and new markets.

Increasing Sales and Profits

By entering new markets, businesses can access a broader customer base. This expansion can lead directly to higher sales volumes and increased profits, as the company is no longer limited to its existing markets and can benefit from new revenue-generating opportunities.

Competitive Advantages

Early or successful entry into new markets can give businesses a competitive advantage. By establishing a presence and building relationships before others, businesses may set industry standards and build long-term customer loyalty, ensuring continued success as markets grow and evolve.

How to Do Market Development?

After knowing why market development is important, the next step is knowing how to do it. If you are an aspiring business owner seeking to boost your business’s growth through market development, follow these key steps:

Set Your Goals

The first step is defining your goals using the SMART framework: specific, measurable, achievable, relevant, and time-bound. Make sure your goals are aligned with your overall business strategy. These goals will guide your efforts, help prioritize resources, and evaluate success after executing the strategy. For example, your goal for market development is to acquire 1.000 new customers in a specific region by the end of the quarter.

Conduct Market Research

Conduct market research to identify potential new markets by analyzing your existing products’ geographic areas, customer demographics, or new use cases. This research can also include customer surveys, competitor analysis, and SWOT analysis to understand customer needs and market conditions in these unfamiliar markets.

Define Your Target Market

After collecting data from market research, use the results to define which new market segments or geographic areas you want to target. This may include geographic expansion within or outside your country, targeting different customer demographics, or approaching new industries. Develop detailed customer personas to tailor your approach appropriately and consider factors like location, income, preferences, and buying habits.

Develop a Unique Value Proposition

Unique value proposition (UVP) refers to the unique benefits or solutions you offer to your customers. Once you have a firm grasp of your new target market, developing a UVP helps attract new customers and set you apart from competitors. Your UVP should effectively deliver significant advantages of your product or service. For example, you can highlight your product’s unique features or exceptional customer service, or you can also position your business as the best solution to a specific problem.

Develop Your Marketing Plan

Build a tailored marketing plan to reach your new target market effectively. This should include positioning and adapting your product or service to appeal to the new audience, selecting appropriate channels (e.g., digital marketing, social media, traditional advertising), and creating compelling messaging that addresses the new customers’ specific needs or pain points. Optimizing your marketing plan will improve your chances of turning new customers into loyal ones. You should also evaluate and adapt your marketing plan based on the performance of each channel.

Develop Your Pricing Strategy

Your pricing strategy is critical to the success of your market development efforts. It is important to find an ideal balance between profit margins and customer value. If your pricing strategy is too aggressive, it may drive away new customers, while overly cautious pricing could lead to minimal profit margins. You should also consider your operational costs, competitor pricing, and target audience to ensure you remain competitive and profitable.

Implement and Monitor the Strategy

Launch your market development efforts according to your detailed plan. It includes executing marketing campaigns, establishing distribution networks, activating sales, and adjusting your product to fit local requirements. Use project management tools to track progress, coordinate tasks, and meet deadlines effectively. Monitor key performance indicators (KPIs) such as sales growth, market share, or customer acquisition rates, and be ready to adapt your strategy based on performance data and evolving market conditions.

Accelerate Your Market Development with Effist’s Premium Office Solutions

To enter a new market, you need agility, credibility, and operational readiness. Effist Suite Office empowers your market development strategy with flexible workspace solutions tailored to your needs. Whether you choose a fully equipped serviced office or a cost-effective virtual office, Effist ensures you have everything you need to launch market development successfully.

Our serviced office provides ready-to-use office spaces with complete equipment, including high-speed internet, executive office equipment, meeting ro oms in various sizes, business lounges, pantry facilities, and comprehensive support services, including secretarial assistance and cleaning. 

Effist also provides virtual office services to support businesses that operate remotely by offering a prestigious business address without renting physical space. Other than a professional address, our services include professional mail handling, secretarial support, access to meeting rooms, and a dedicated phone number handled by professional customer service.

We are strategically located in South Jakarta’s central business hubs, Gandaria Office 8 Tower and 88 Office Kota Kasablanka. For more information regarding our serviced office and virtual office, email us at contact@effist.com. 

Editor: Trie Ayu Feminin & Irnadia Fardila