Market Development strategy arid Product Development strategy Differ – Explanation
Market development is a business strategy whereby a business attempts to find new groups of buyers as potential customers for its existing products and services. In other words, the goal of market development is to expand into untapped markets. These potential customer groups may already be served .by competitors or may not be currently marketed to by anyone for the product.
The Process of Market Development: Market development is a two-step process. It starts with market research. You need to engage in segmentation analysis to determine which market segments are worth pursuing. A segment is simply .a small slice of an overall market. You can segment a market along demographic, geographic, psychographic (based on values and lifestyles), and product-benefit lines.
Once you have determined which market segments are worth pursuing, the second step of market development involves creating a promotional strategy to penetrate the new market. For example, you may decide to engage in an aggressive television and direct mail campaign. You’ll also have to consider the pricing of your product. If there are competitors in the market, then you may opt for penetration pricing, where you aggressively price your product lower than the competition in order to quickly obtain a large share of the market and customer loyalty.
Product development strategies have helped Enterprise to develop services in a market where it was already an established and profitable business. This was considered to be a medium risk strategy. Examples of Enterprise’s product development include its unique `Pick-up’ service. This helped to lead the market in this product offering.
Enterprise’s Flex-E-Rent service (a long-term vehicle rental solution designed to meet the growing needs of today’s businesses) and its Business Rental Program (offering customers a bespoke program with special pricing) are examples of product developments. These have widened its service range to improve the customer experience and strengthen its brand identity.
Factors in the external environment affect decisions about product development. These are things taking place outside the business that influence decisions within the organization. Governments around the world are committed to reducing global warming- through more eco-friendly technologies, while consumers are looking for different mobility solutions. Enterprise, therefore, created WeCar, a membership car-sharing program which offers customers a car at an affordable hourly rate. It typically uses fuel-efficient vehicles or hybrids to help address concerns about the environment. Car sharing or hourly car rental can also help to reduce the number of cars on the road. In this way, WeCar members help to contribute to a cleaner environment.