What is a market expansion strategy? Why should you have one? Here is all you need to know.
Growing a business is by no means an easy task. But it is one that you can achieve with hard work and smart planning. Once one has begun to challenge their market growth with a measured and careful understanding of their undertaking, nothing can stand between them and positive market development. So what exactly is ‘market expansion strategy,’ and what would it take to implement the said strategies successfully? Read the article to find out all this and more.
What is a ‘Market Expansion Strategy’?
In the simplest of terms, one could describe a market expansion strategy as the strategy adopted by an organization when it attempts to achieve a high level of growth compared to its past achievements. Once you’ve exhausted your previous threshold, there’s nowhere to go but up! Thus, these strategies help organizations progress when they have already grown as much as possible in their already existing channels.
A good marketing strategy must tap all the bases. At all times, the primary focus must be that the markets currently in your pocket are satisfied and content with the services and products you and your organization are peddling. Thus, the proficiency of your facilities, assets, the new and even existing product, and what potential new grounds could be focused on with your current strategy are all carefully examined.
Once you have all the inputs, pursue new channels and new potential customers effectively and effortlessly.
One should note that there have been cases where companies may try to push into fresh markets. They blindly extend without taking proper stock of the risks and rewards involved in such a move. Thus, a good market strategy keeps you in check to ensure you are not moving too fast for your good. It ensures you can afford the highest chance of success and eventual fortune.
Why Would One Need Market Expansion Strategies?
Still not sure you need a proper plan? Fear not. We have many more points still to convince you of a good strategy’s legitimacy. And how it will take you a long way. While the previous section may have given you a quick and brief understanding of a market expansion strategy, this section will expand more on why such market expansion strategies are essential and much needed when you are looking to grow in the market.
Find New Business Opportunities
It will allow you to expand your avenues and reach out to newer business opportunities. When you have an ill-defined or vague market plan on expansion, it is more than likely that you will happen to neglect real-life business opportunities and miss out on them. An excellent example of this would be as follows. You put all your eggs in one basket. Without considering the fact that the market is constantly changing and new opportunities are always coming up. Without any resources to expand, you would be unable to take advantage of newer avenues. Because you are fully committed and made a short-sighted lousy move.
A market expansion strategy that is high quality will help you prep for such business opportunities. It will help you focus more on looking at several different avenues, so you don’t miss any new opportunities. In this way, you will be able to act quickly with these changes and not strain yourself for no good.
Cut Back On Useless Expenses
Looking for places to cut back on useless spending is always ideal, and a good strategy will do just that! If you have a suitable market strategy in place, you could cut down on spending. You can do so by being more selective with your investments. Focus your services and products where they are wanted.
For instance, if you are heavily marketing an app for restaurants to showcase themselves, you could even potentially expand that app to showcase hotels too. Hit two or more birds with one stone. Instead of blindly focusing all your time, effort, and money or research and expansion on creating new features just for restaurants, you can appeal to those who seem interested and cut back on costs. The case and point of a good strategy should be to develop logically. Steer clear of overspending on a market that is just not going your way.
Reap Tax And Compliance Benefits
With a good strategy, you can also look forward to tax and compliance benefits for business operations. This could, again, reduce your expenses and reward you for proper methods of compliance. By making sure you follow the several codes that define them, an appropriate expansion of marketing strategy will strengthen your benefits.
A good example of this will be writing off your expansion on your taxes. Undertaking procedures like getting proper safety testing and abiding with the FDA protocols could also help you reach compliance, thus making your expansion process easier and more streamlined.
Reduce Future Risks
To keep a business running is a challenging venture. Thus, one can expect expanding a business to be an inherently risky process, too. One that could cause as many problems as the benefits you may reap from it.
That being said, a quality market expansion strategy considers all the market risks. This provides an extra layer of protection that ensures your company stays robust and secured.
Reducing any risk is always crucial as it helps one steer clear of unnecessary mistakes that companies and businesses that have not taken stock of the risks are often faced with. In the long run, all this works to reduce the probability of you and your organization running into any unforeseen problems dusting expansion. So even if you face risks, you can confidently take the next step. You know that you are prepared for whatever the future has in store for you. New pastures await you!
How To Develop A Successful Market Expansion Strategy
And so, we come to the 1 million dollar question, how to tailor a market expansion strategy that is best for your business needs and wants? Given below are various steps and procedures one can follow to create the most effective market expansion strategy for your business and help it reach its fullest potential:
Start With A Review
Take a step back and do an overview. The first step towards change is awareness. Thus, if you want to set up a successful market expansion strategy, you need to take stock and find the reason as to why you want to expand. You can do this by first jotting down anything you think might be the reason why you want to embark on this expansion journey.
Next, pinpoint the new avenue you wish to expand into and think about why you are considering moving in that direction. Why is this the next new break?
You can then start making a base on who your services or products may appeal to. Make a list of such potential buyers/customers/clientele. Begin researching the various ways you could plan towards reaching out to them or how they could reach you. Be it via social media adverts, billboards on highways, or a blip in the sky, explore all the potential marketing channels that you can work on to reach out to your intended audience. This could also apply to you targeting them using pay-per-click ads and social media. Getting your product into someone’s storefront, or any other strategy.
Once you’re done with jotting down all the essential details and summing up your expansion strategy (in its most initial draft, of course), all stating who your target audience is, what your target market is and how you will expand into it, it is now time to create a formal proposal in line with the strategy. A journey alone is fun, but why shun company when it is available? Be sure to get the executives or partners’ approval and support.
Set Up A Realistic Financial Plan
Now that everyone involved (the executive, partners, or co-founders) is down to clowning. It becomes essential to explore the various ways in which you could finance your new market expansion strategy.
You could begin by pinpointing any expenses that may accompany the market expansion strategy you have in mind. Break down the various expenses that each venture will require and take stock of the resources needed to reach for eventual success. Also, be sure to consider the timeline. How long it will take for this new expansion project to become a profitable venture.
Convince yourself that this initiative is a brand new one. As a business of its own, work out the details in a way that ensures that this business will be able to finance itself within a stipulated amount of time to make sure the loss does not outweigh the gain, and you can make back your initial investment.
New Opportunities Await You In New Channels
Assuming you’ve followed steps one and two, you should now have a formal plan and knowledge of how you plan to finance this new venture. Out with the old in with the new! In this case, though, keep with the old but time to venture into the new too! What a business tycoon you are about to become. Start exploring new channels. These new avenues will provide you opportunities and pathways to present your services and products to your new and the intended audience you were targeting.
Be it via digital advertising, selling online, or using the old-fashioned way and selling your products through retail outlets, there are many ways in which you could start expanding and peddling/selling your product/services. It must be kept in mind, though, that moving into new markets using the proper channels is critical for gaining the attention of your new customer base effectively and making this venture worth the trouble it took to set it up. Else it will all be in no.
Catch The Eye Of Your Audience
Human beings are easily distracted animals. Whether you use this fact to your advantage or let it pass you by could be the difference between being a successful businessman or a social washout with not a penny to his/her name. To engage your audience, make sure to use various marketing components to do strategic marketing. For instance, clearly highlight the value that your service or product adds. Any efforts should go into marketing your company/organization as one that is kind and authentic and focused on making high-quality products for their most precious buyer’s perusal. Note that the traditional metrics like website traffic can not always be the most real account of one’s success.
Brand Growth With A Capital B
It’s about time you outgrew from your initial plan. If it works, though, keep at it. That being said, in most cases, you should now take the things you observed and keep watch on from the first few interactions and engagements with your new audiences and build upon what works and work to fix/remove what doesn’t. Be sure to note what motivates them, their habits, and what keeps them coming. By better understanding your new customer base, you could later reach out and identify more potential customer bases of those who have similar habits, motivations, and behaviors. Remember! While targeting specific audiences is always smart and good, the main goal of any business/service is eventual market saturation.
Once the foundation of the target audience has been set, you should be able to start targeting new audiences that you had not even considered before by making up new interesting and eye-catching marketing messages that appeal to broader audiences.
It may become more and more challenging to strike a balance between the targeted messaging you initially used. You can fix this problem by creating one single message that fulfills criteria for both generic and targeted audiences. Although hard, it’s most definitely doable. While doing all this, be sure to remain consistent in terms of messaging as much as possible. Otherwise, you risk losing both sections of customers. Nobody likes an inconsistent brand.
Work To Grow Existing Product Sales
One of the first and foremost objectives should be to try out some of your existing products in the new market. See how well they do in the new setting. Getting a feel for the general pulse of how people are feeling about this. By taking the feedback from customers, you can create messaging for your existing products and services in the fresh market you are venturing into. Using all this information, evolve a strategy that can deliver value.
Reduce the effort and cost customers have to put in to get to your product or service. Given below are some techniques you could use:
- Do giveaways and contests
- Try discount events
- Referral programs will keep your customers engaged and interested.
- Introduce a new line of services or products
Exploring alternate revenue opportunities through developing a new product could be just the breath of fresh air needed for expanding your market potential. Start by researching and exploring needs in the market. Look for ones that are not being met and ones that you could potentially achieve with your new product, and then begin to invest in new product development. Once the new idea has been developed, assign a team to flesh out all the remaining details.
Consider letting your customer base in on the process during the design phase. This could potentially help you make a product tailored to majorities needs, and this would, naturally, increase your sales. Keep in constant touch with your customers via the website or even store surveys. It will surely help you produce and make products that resonate with the masses.
Conclusion
To conclude, it’s clear for all to see that keeping your business flourishing irrespective of what’s happening in the economy can be possible with a strong market expansion strategy. While embarking on this market expansion journey, the last few tips we leave with you would be as follows:
- Be sure to conduct in-depth market research
- Don’t be shy to learn all you can from your competition
- In this digital age, make the most out of the online opportunities
- Don’t fear away from the challenge. Growth is always a risk. So invest in market expansion
Scaling Partners – Who We Are
At Scaling Partners, we are experienced at scaling startups.
Scaling Partners helps you bridge the knowledge, process, and gaps in your business. Connected services. Hands-on solutions. Real experience.
We know business growth isn’t easy. But we make it easier. Faster. More sustainable. How do we do that? By partnering you with the processes and insight you’re missing and the people who’ve been through it all before. And because we do it as a service, it’s brilliantly affordable.
Learn more about how we support startups with their International Expansion.
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