Market Development is a 2-step process to tap the untapped market. It starts with market research wherein a company does a segmentation analysis and shortlists small sub-group 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. 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 Another aspect is the pricing of the product. If there are competitors in the market, you may have to take into account the price of 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 in order 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.
