Named Founder Friendly Investors 2021 & 2022 by Inc.
Growth is essential for any company, especially startups. But many markets and channels have natural limits. Once you’ve reached those boundaries, exploring a new market expansion strategy becomes necessary.
Market expansion strategies allow you to materialize opportunities outside of your current channels. To expand, the organization can target new customers in the current market, develop new products, and move into new locations.
If your growth is starting to slow, consider a new business expansion strategy to break through your plateau.
First, what is market expansion? Simply put, it’s the process of widening your pool of potential customers to drive growth by entering new markets.
The market expansion definition describes efforts to grow your company and target new customers by creating new channels, markets, or products.
Jumping straight to new products or geographical markets is the default, but combining services with your product or marketing to a new demographic can also work. It’s also possible to grow your business by increasing sales volume within existing markets or selling to new markets.
Your marketing growth strategy could also involve finding new ways to get more value from existing customers. Jumping directly to opening a satellite office across the country doesn’t need to be the first step of your market expansion framework.
The key to sustainable market expansion is identifying the strategy that fits your company. Here are a few examples of successfully executed market expansion strategies that might apply to your business.
Uber is an excellent example of market expansion. It entered the mobility market in select cities by offering competitive pricing while maintaining high-quality service. After validating demand for their product, they expanded to cities across the globe. They continued their growth thereafter by targeting existing customers with new products and services.
Uber has also been aggressive in marketing its brand by providing incentives and discounts for new customers and saturating the media with its advertisements. The strategy has allowed Uber to become a household name worldwide.
You can use a new market development strategy when you want to expand into new markets with products or services already established in other markets. For example, Coca-Cola has employed this strategy for years by constantly introducing its global brands to new countries and regions.
Apple’s strategy involves developing a new product line or extending an existing one to increase sales volume and market share. For example, Apple launched the iPad Mini tablet to capitalize on the opportunity to reach more consumers who wanted smaller tablets than those offered by its competitors at the time.
Amazon’s marketing growth strategy relies heavily on diversification. Starting as an eCommerce website selling books, the company has expanded offerings to include cloud computing, entertainment streaming, and grocery delivery. Part of that market development growth strategy involved acquiring companies that were leaders in their respective industries (i.e., Whole Foods).
Successfully entering a new market requires a well-developed strategy.
Before developing a market expansion framework, review your current business performance. You need an idea of what’s working and what isn’t to decide where to focus your limited resources.
Before launching your product or service into a new market, research the competition, pricing trends, and consumer needs for this industry segment. This research ensures that you are entering the right market at the right time with the right offering.
Each business has unique goals and objectives when expanding into new markets. Defining clear goals before entering unfamiliar territory will help you recognize if your market development growth strategy is succeeding.
Once you’ve decided where and how you want to expand, it’s time to adapt your product and marketing materials. Be sure not to neglect any aspect of your marketing efforts, from packaging designs to pricing strategies and customer service. Fitting the needs of this new audience, both culturally and economically, will increase your chances of success.
Once you’ve developed a robust business expansion strategy, it’s time to formulate a concrete plan with actions and deliverables.
Plan and budget enough resources for investment in research, marketing materials, and possibly travel.
Consider how you’re going to implement your market expansion framework to reach your new target audience. How can you entice new customers to try your goods or services? Try to offer them something they can’t get anywhere else or focus on a new demographic.
Once you’ve identified some new methods for reaching customers, focus on building customer relationships. Email and other content marketing campaigns encourage engagement with your brand and help build awareness and trust between consumers and businesses.
Growing past your existing channels requires content that resonates with new audiences. Blog posts and videos educate people on what you do, why you do it, and how they can get involved with your business.
Market expansion is a time-tested strategy to grow your business. Success often lies in identifying an appropriate market, developing a compelling value proposition, and executing with passion and integrity.
Your core business can help identify where you should look for new opportunities. Look at your customer base and ask yourself what products or services adjacent to your business would make them better off than they are today. Then, consider expanding into new geographies or industries with similar needs.
Be clear on what sets your product or service apart from the rest and why people should choose it over the competition. Your value proposition should only include things that matter to customers, like price, features, quality, convenience, reliability, and support.
Who is your new target audience, and what are their needs, wants, and pain points?
Further, don’t forget to keep an eye on your competitors. Keep track of what they’re doing well and how you stand out from them.
Market expansion is a vital component of any growth strategy. It’s essential to recognize when you’re nearing the limits of your existing channels and identify how your business can grow into new sectors.
Practice identifying opportunities early on so you can execute them before someone else does. You may find that new markets complementary to your business are the most accessible.