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Market development

One of the four strategies of Ansoff’s matrix – a well known model to use when making strategic decisions about marketing, and specifically over strategies for achieving growth in a national and an international context. Market development concerns increasing sales of present products by selling them to new markets eg to new segments, or to new geographical areas. This strategy assumes that there are new markets which can be exploited profitably. It is more risky than market penetration as it involves one unknown and requires more extensive market research. It can be achieved by: targeting new segments of different age groups, social and economic class, industry or household, in present geographical markets, or targeting new geographical markets, nationally or internationally. It is often a difficult strategy to adopt when there are strong cultural differences. Like market penetration, the emphasis is often on promotion as market development is usually achieved through careful advertising to effectively position the product in the new market place. Although it is tempting to state that the development costs will be lower than that for developing a new product, it should be appreciated that there will be substantial costs in terms of market research, promotion and the development of new distribution channels.

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