You cant run the same advertisement campaign across the world due to cultural differences. Or it is another region within a country. Disadvantage: Expose Your Weaknesses In addition, creating a marketing strategic plan can also identify your weaknesses as a company and as a business owner. Lack of Results Market penetration strategy isnt always effective, especially when a company enters an industry where prices are already set low. The aim of market penetration is to effectively use your product, enter the market as quick as possible and seize a large market share. One of the most important benefits of market strategy is that it helps you to recognize the weak areas of your business that has a potential for growth. With market penetration, the market size is fixed so the strategy focuses on maximising the potential of an already an existing marketplace. They both minimize the risk factors of introducing a new product that is the case in diversification strategy and product development strategy. As the software became the Facebook we know today, it became increasingly important to reach new users and markets in order to expand. The company spent the whole year of 2015 focusing on the one market, the focus was to establish growth, success, and credibility, and then move on to the next market. Although the development of a great marketing strategy attracts new customers, the downside is that its too expensive. For instance, when a firm aims to increase sales, lowering prices is an effective tactic to attract potential customers. Its because of diversification (scooters, bike, food delivery, etc.) As long as your product is comparable in value to your competitors, then pricing may be an easy way to stay competitive. Other than that, hes a fun loving person. This is because it requires less investment and can be done quickly. Online ride sharing started in San Francisco in 2010, and nowadays, its offering its service in more than 700 cities across the globe. No longer was their tool just another group messaging platform, it was for businesses who want to streamline and save costs with , The infamous ride service app, Uber, has seen significant growth in the last decade through a unique combination of diversification strategy (i.e. Contact or deal with HM Revenue & Customs (HMRC), Companies House returns, accounts and other responsibilities, Selling, closing or restarting your business, Environmental action to improve your business, Reduce, reuse, recycle your business waste, Environmental guidance by business sector, Sample templates, forms, letters and policies, Business growth through acquisition, mergers and partnerships, Top tips to prepare your business for growth, Improve the way your business operates (video), Growing a successful business - OutsideIn, Using personal data in your business or other organisation, UK General Data Protection Regulation (UK GDPR), Understand staff contracts and your responsibilities, Understand Self Assessment and your tax return, Registering and getting started with PAYE, Companies House annual returns and accounts, Price lists, estimates, quotations and tenders, Advantages and disadvantages of using social media, Understand Tax and VAT when self-employed, Improve your cashflow and business performance, Company registration for overseas and European companies, Filing company information using Companies House WebFiling, Find company information using Companies House WebCHeck, Accountants and tax advisers - HMRC services and content, Online tax services for accountants and tax advisers, Help and support for accountants and tax advisers, News and communications for accountants and tax advisers, Compliance checks for accountants and tax advisers, Appeals and penalties for accountants and tax advisers, Tax agents and advisers forms, manuals and reference material, Contract types and employer responsibilities, National Minimum Wage and National Living Wage, Maternity, paternity, adoption and parental leave, Coronavirus (COVID-19): Staying safe at work, Environmental performance of your business, Electrical and electronic equipment manufacturing, Security, fire and flood protection for business property, Tax breaks and finance for business property, Disabled access and facilities in business premises, Patents, trade marks, copyright and design, Growth through product and service development, Capital Gains Tax when selling your business, carry out a segmentation analysis of your existing market, shortlist those market segments which you feel you should pursue, customer preferences, interests and lifestyle, pricing - you could implement competitive price structures with offers and discounts or, to command a higher price, provide a product with more value than the competitor's, distribution - you could develop new channels to reach target customers, eg sell online if you currently only have a brick and mortar shop, branding - you could create a new brand for products aiming to reach a target market or a specific customer segment, promotion - you could consider tailoring promotional messages to entice customers with offers, vouchers, loyalty schemes, etc, sales - you could target a different demographic segment or type of customer to create new leads and opportunities, product development - you could alter an existing product or develop a new one for the untapped market. Micromarketing has advantages and disadvantages. Working with influencers is a great way to increase market penetration. If you are facing problems in various areas, then market strategy wont help you to deal with them effectively. It is calculated by taking the companys total sales over a given period and dividing it by the total addressable market (TAM) during that same period. Market development has both positive and negative sides as well. 2. Sometimes, products are expensive to create and small businesses tend to struggle while trying to produce enough to lower the production and product price. It also targets prospective buyers in new segments or new niches. Definition. Understanding Market Penetration Strategy, Market Development vs. Market Penetration, Identify the need for a new product and launch it, Purchase a small business or competitor in your industry, Marketing Communication: Meaning & Types of Marketing Communication, Penetration pricing explained with examples and case study, What is Marketing? Bedford Square Here are two examples to consider: Discovering new uses for your product enables you to promote to new customers and expand into new markets. Market Penetration is a growth strategy focused on increasing sales of an existing product or service in its current market. The principles of the bank's operation may not change or may change slightly. When you have got biased data from your research, then you cant make the right decisions. Marketing strategies provide you with information that you would not have access to otherwise. ), market development strategy (i.e. So, considering that youre willing to stay as the market leader, the only choice you have is to outplay them. This allowed them to better articulate the value of their software. Product differentiation is a strategy used by businesses to highlight the unique features and benefits of its product or service to separate it from competitors. It helps companies in the growing period to identify new opportunities and sell their current products in the new unexplored market. Market penetration can lead to fast growth for a company. ), and product development strategy. They also need to research the competition and find ways to differentiate their products or services. But it requires comprehensive market research that the new market would add some value. This can be done through traditional methods such as television and print ads, or through digital methods such as online banner ads and social media campaigns. There are multiple advantages of exporting for businesses of all sizes. Diversification involves developing new products for new markets. The absence of a clear vision of and plan for integrating a fintech into a legacy structure may not bring the desired effect. 2. The platform then refined and developed its marketing strategy and went on to the bigger markets of Chicago and San Francisco. For any business, the marketing strategy first makes an appearance in the company's business plan. Forming partnerships with other businesses can help increase market penetration. 2. I agree that it can be difficult to create a strong go-to-market strategy for the business owners but not for the professionals. Part of Slacks market development strategy includes, This differentiation in the market has set them apart from other products with very similar features. Although market penetration strategy doesnt make any radical changes to the firms corporate marketing strategy, it has an unbelievable potential to grow profitability and revenue. Otherwise, it would be very difficult to precisely target and narrow down your target customer market. Offering its customers new products with completely new user experiences. Market penetration also helps to create goodwill for a company. Market penetration can lead to fast growth for a company. The most important thing to remember about market penetration is that it takes time and effort to be successful. The NBA has always dominated the relatively large and lucrative market for professional basketball here in the United States, but the league also had the foresight to recognize how much more lucrative business could be if they could successfully bring their product to international markets. Product Life Cycle Analysis & Price Strategies, Disadvantage of Entering a Mature Market Economy, The Effects of a Change in Business Environment on Strategic Planning, Advantages and Disadvantages of a Marketing Strategy, Brandon Gaille: 8 Pros and Cons of Product Development, This Matter: Research and Development: Advantages and Disadvantages, On Strategy: How to Choose a Market Development Strategy, Australia Unlimited: Market Entry Strategies. It would give you new ideas to market and promote your product. It does this by expanding into untapped market segments. All of your investment and time consumption would go to waste due to one factor. If youre not sure how to get started, Market Development Strategies can help. This can be done by-. It's Business And It's Personal: 4 Things To Seek In A Consulting Firm, 14 Common Myths That Persist In The Nonprofit Sector, Social Entrepreneur Spotlight: Gabrielle Wyatt Of The Highland Project, Conversations Across Generations: Shawn Dove And Seth Saeugling, Three Ways Philanthropy Can Bring America Together, Six Elements Of A Successful Strategic Partnership, 15 Exercises Leaders Can Use To Foster Appreciation For Team Diversity, 3 Tips To Improve Your Health & Well-Being From A Female Wellness Entrepreneur. It's safer to stick with something that you and your customers already know than to venture into untested territory. It's a clear signal to investors that the bank is developing its digital services. The goal and objective of every business are to satisfy the needs and requirements of customers. It now also integrates with many other popular SaaS products such as Dropbox, Zendesk, and Zapier to ensure ongoing growth and user adoption. The goal is to increase market penetration by targeting this relatively untapped group. While creating a marketing strategy for your company can provide you with a variety of critical and insightful information, it's only helpful if your analysis is done properly and thoroughly. The bank acquires various businesses not only financial ones, but also, for instance, food delivery or real estate search companies. The approaches to building an ecosystem can differ: 1. Several factors contribute to successful market penetration. Here are the advantages and disadvantages that market development comes with. In many cases, if the marketing strategy has more advantages than disadvantages, this strategy could be implemented. Increased Promotion Investing more time and strength in a promotion can dramatically increase market penetration. Working with resellers is a great way to increase market penetration. Existing customers can be a great resource for finding new markets, and also for helping to promote your products or services in those markets. Market penetration can also help to improve a companys prospects by helping it gain market share and become more established in the market. All Rights Reserved. The whole process would take a minimum of 3 months. In fact, your strategy can include customer surveys and evaluations of. This means that there is less resistance from customers when they are introduced to the product or service. Integrated marketing is an approach that uses multiple channels to reach customers. By keeping as many people in the app as long as possible, they can drive more revenue through advertising to these users. Image: Marketing Strategy Advantages & Disadvantages. Finding ways to differentiate yourself from other companies in your space such as offering better support, more competitive pricing, or extra features that are in demand and not offered by your competitors, can entice customers to switch over to your product. Expanding into new geographical areas is a great way to increase market penetration. Price Adjustment One of the most frequently used market penetration strategy is price adjustment. This could involve setting up new offices, opening new stores, or expanding your distribution network. For instance, you can specify and target men or women. Uber is an online ride-sharing platform. The market strategic campaign allows you to promote your business and spread your brand awareness. It does this by expanding into untapped market segments. To calculate market penetration, you need to know two things: 1) the size of your target market, and 2) how many people in that target market have purchased your product or service. 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