Market development is the search by marketing managers of companies or organizations to find new markets for existing products. In market developments, there are existing products and new markets. The company’s strategic goal is to achieve growth by expanding the market. The management of an organization or company will develop a product to meet a market need. Any organization that wants to be successful in business must focus on both product and market development. However different business environment calls for different marketing decisions.
The biggest difference between Market Development and Product Development is that the former is a strategic method with a focus on the development of new markets segments, while the latter involves creating new products for an already existing market. Ray Nilanjan highlights strategic marketing methods that lead to business growth when they are applied by organizations (Nilanjan). Ansoff argues that marketing strategies such as product and market development are among the growth strategy explained. Ansoff claims that for an organization to be successful, it must follow four distinct growth strategies (Nilanjan, 2015.) However, we will only discuss two: product and market development.
A product’s life is defined as the time between its introduction to the market and the time it leaves the market. A product will also go through four growth stages, beginning with its introduction to the marketplace and ending at the point of exit. The stages of product life include the introduction stage, growth phase, maturity stage and finally the decline stage. Introduction stage refers to the moment when a new product is released on the market. The growth stage is the time it takes for a newly launched product to reach its full potential. The maturity stage is when the product has been on the market long enough. The customers will also have become familiar with the product during this period. A product’s decline stage is when it starts to lose market share after dominating for some time. In the event that a product is approaching its decline, a replacement product can be introduced. When a product leaves a certain market, it creates an opportunity to introduce a new one.
Management of an organization may develop a novel product when they recognize that a certain market has a requirement for it. However, the company already meets this need with another product. Management may be asked by customers to create a product to meet their needs. In addition, the government may offer incentives to encourage companies to create new products for them. A company may be forced to create a product to compete in the market with a competitor.
Management may explore a new market to increase growth. The management might also find themselves in a market with stiff competition. To counter this competition, they may explore new markets for their product. A second reason for market expansion is the desire of the customers to get their products closer to them. The chain industry, such as supermarkets spread across multiple towns and owned by the exact same person, is a good example of how to reach out to customers.
A company might also discover that a market is already open for its product, and decide to take advantage of this opportunity. To counteract market dynamics and maintain steady growth, companies must adopt different strategies. In conclusion, both marketing strategies for growth are crucial to any business or organization’s growth. The second difference is the context in which each of these strategies is used.