For more information on how we use your data, read ourprivacy policy. By tapping into this sub-strategy, the bank receives the following opportunities: 1. The cosmetic companies have been focusing on men for the past 20 years. Marketing strategies often require market research and that research can help you to gain a better understanding of the market, how it works and who your customers really are. For example, a marketing strategy for a particular product may include advertising in television programs that have high ratings, but a disadvantage could be sponsoring the program that some may find offensive or in bad taste, which would result in disinterest of product or service. It's sometimes not enough to come up with something innovative . and market development strategy (luxury vehicles and ride-sharing). With market penetration, the market size is fixed so the strategy focuses on maximising the potential of an already an existing marketplace. The strategy that is more attractive for one group may not be interesting for another group. All you need is to think about things from a different angle and change your perspective. Its because of diversification (scooters, bike, food delivery, etc.) Considerations about which demographics are likely to respond to which types of traditional marketing can result in more strategic and cost-effective marketing plans. One of the advantages of a product development strategy is that you can respond to customer needs as they change. This is usually accomplished through recommendations and by social media networks such as Facebook and Twitter. You must have JavaScript enabled to use this form. However, no one knows the key features of your product better than you. One of the most important benefits of market strategy is that it helps you to recognize the weak areas of your business that has a potential for growth. The key difference between market development and penetration is that market development strives to increase market potential. This is a BETA experience. The key to a market development strategy is the understanding of the current baseline performance vs. what we want our future performance to be, and then coming up with the strategy to move from A to B. Today, well discuss the advantages and disadvantages of marketing strategy. Here is a comparison of some attributes of micromarketing: Lower marketing cost vs. high cost per acquisition More closely targeted advertising can decrease your marketing cost because it allows you to target a smaller group of people. Earlier they used to target and focus only female segment of the market. Other than that, hes a fun loving person. The market strategy reduces your risk factor by telling you the type of product or service you should produce and the market to enter. Some of the cons and advantages of marketing strategy are as follows; Developing an effective and actionable market strategy requires significant customer market research, data, competitor analysis, KPIs, metrics, and various indicators to understand the customers and market. You need to adjust your campaign for different cultures, and it is not easy sometimes. Market penetration can lead to fast growth for a company. It does this by expanding into untapped market segments. Along with being time-consuming, market strategy is highly expensive. Market penetration is an important tool for companies looking to grow their business. Here are some market penetration strategies you can consider: 1. For instance, if we use an effective marketing strategy that will increase product awareness in certain areas itll result in higher product consumption that will also increase market penetration. During this process, the cost is usually the main factor that determines the pros and cons of a strategy. (vitag.Init = window.vitag.Init || []).push(function () { viAPItag.display("vi_23289101301") }), Conclusion: Advantages and Disadvantages of Marketing Strategy, What is Business Management? Furthermore, some companies risk more and first buy products in bulk (for discounts) and then implement the penetration pricing strategy. Finding ways to differentiate yourself from other companies in your space such as offering better support, more competitive pricing, or extra features that are in demand and not offered by your competitors, can entice customers to switch over to your product. food delivery, bikes, scooters, etc. One of the primary benefits of exporting is access to a global market of buyers. By keeping as many people in the app as long as possible, they can drive more revenue through advertising to these users. Finding ways to, 2. All of your investment and time consumption would go to waste due to one factor. French bank Socit Gnrale recently acquired FinTech Shine for a rumored 100 million in order to offer a full online service to its business customers. When it comes to business, market penetration is key to success. Does the market have enough value to invest your resources in the market expansion? This allowed them to better articulate the value of their software. Executing a successful marketing strategy is quite time-consuming. Considering Porter's five forces as a business analyst can provide information on how a firm can accomplish its objectives and boost profits. The marketing team communicates these unique qualities through their campaigns and promotions. Advantages of Market Penetration Strategy. When you're just starting out, watching your company grow organically and making decisions based on what you learn can be just as beneficial. She does one-on-one mentoring and consulting focused on entrepreneurship and practical business skills. For instance, when a firm aims to increase sales, lowering prices is an effective tactic to attract potential customers. Companies do so by meeting the list of requirements that customers are demanding. As the founder of a startup, you will undoubtably find yourself forced to make countless important decisions that, collectively, will determine the overall success of your company. 3. Influencers are individuals with a large audience who can promote your goods or service to their followers. Market penetration can be a great growth strategy for businesses of all sizes. Digital market entry is the sweet spot of our firm. As a new business owner, there are many questions you'll need to tackle. Forbes Business Development Council is an invitation-only community for sales and biz dev executives. Market penetration strategy takes advantage of low prices to increase product demand and increase market share. Market Share can be increased through initiatives such as price cuts, promotions, and marketing campaigns. During her tenure, she was also co-founder and editor of AccountingTomorrow, a blog focused on intergenerational workplace issues that is still thriving today. Successful marketing strategy may depend on the use of different strategies to obtain the best result . There are multiple advantages of exporting for businesses of all sizes. The recruitment company started its journey from Seattle and Portland. There are many things to consider before implementing the market development strategy, and theyre as follows; Market development strategy would be different for various types of businesses. Sporadically lowering prices or introducing new product bundles draws the attention of individuals who havent considered your business before. It's safer to stick with something that you and your customers already know than to venture into untested territory. Because market penetration strategy has the lowest risk involved, most companies start here and try to find ways to promote growth without the inherent risk of entering into new markets. Effective growth. The goal is to find out the new interested customers in the current market. For example, before implementing a market development strategy, you might want to: Competition is fierce, no matter which business youre in. The goal is to increase market penetration by targeting this relatively untapped group. This is where market development comes in as a beneficial strategy. The advantage of Viral Marketing strategy is that it manages to present the product or service extensively, but the downside is that there is no control on how the information is spread. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. The Economic Times says; The company May have to take the support of both audio and visual media to push the product deeper into the market.. Anew company should concentrate on gaining its worthy place in the industry, rather than trying to beat others low prices. Market penetration can also help to improve a companys prospects. Along with being time-consuming, it requires a huge investment. Leverage the resources available to you, such as marketing information and demographic data. Similar to Slack, Facebook started out as a small, localized tool. There are various social media platforms and you cant afford to run your campaign on all media channels. 2. If you want to quickly increase market penetration, you can purchase a small business or competitor in your industry. Do you a specific target market where you havent entered yet? Would your product be successful in the new market? The cost of implementing a strategy depends on the company's appetite and approach. So, periodically updating your product (always to better, never lower the quality) and changing its packaging will, most probably, benefit your business. Some tactics, for example, may employ advertising alongside social media campaigns and direct sales outreach to target consumers in underpenetrated areas. Market penetration is often used as a way to gauge the success of marketing and sales efforts as well as to set goals for future growth. By listening to what their customers want, Slack has been able to make minor changes within its app to attract new users in new markets. Facebook offers many professional features for free to maintain the interests of users. Here are the advantages of conducting market research: 1. Hence, the marketing strategy has been under fire for using controversial celebrities. An entrepreneur must examine each marketing strategy and weigh their benefits and costs. The acquisition involves acquiring another company that already has a strong presence in the desired market. Let's take a closer look. Several factors contribute to successful market penetration. This could involve developing a new product or improving an existing one. This could involve adding new functionality, improving the design, or increasing the quality. Though you may have an innovative idea and a capable team to execute, there's no guarantee of success. Development of a Marketing Strategy To develop a marketing strategy, one should analyze the advantages and disadvantages of each aspect. Advantages of a Marketing Strategy Maintain Focus When you have a bunch of tasks fighting for your attention, it's easy to lose focus. Disadvantage: Cost Executing successful marketing strategies often takes time, money and resources and for a small company especially, that can be frustrating. It becomes more complex when competing with large firms. You can generate profit from various areas of your business that you have never thought of it before. Today, we see Facebook as the worlds largest social media platform, and the platform is still expanding and entering into newer markets. If your product/service was small, then expanding it into the new geographic global market would be the next step of your business. The company sells its products in more than 200 countries and has a 42% market share in the global soft drink industry. However, deciding the appropriate marketing strategy is a matter of personal choice in some cases. The company helps with the selection and purchase of real estate. With a central focus on how people use the app, and what they are trying to accomplish while they do so, Facebook can constantly develop new market strategies to drive growth, all within their core product. So, considering that youre willing to stay as the market leader, the only choice you have is to outplay them. While you build out your infrastructure and revenue model, develop your products and services and figure out how to manage daily operations, you'll also need to address how you'll market your company and reach new customers. This can be done through coupons, sales, and special promotions. Although the development of a great marketing strategy attracts new customers, the downside is that its too expensive. It allows for easy diffusion of products or services, creates goodwill, and can lead to fast growth. Making it easy for customers to purchase your product or service will help increase usage. The whole process would take a minimum of 3 months. Nowadays, traditional banks often choose to provide their own back offices. Market development is a growth strategy that involves selling your existing products or services to a new group of customers. Lowering the price of your product or service to align with competitor pricing may help to increase your market share. Note, that the campaign must be well-planned and analyzed because if your ad looks like XX% off on Y Product for a limited time can be easily countered by competitors with their own promotional campaigns and also retrieve their lost market share. I've seen this strategy applied by banks around the world. Its critical to check your market penetration regularly to detect any changes. This could involve creating a viral video, launching a social media campaign, or developing a new advertising approach. Managing risks The first major advantage of conducting market research is improving your risk management strategy. Discovering new uses for your product enables you to promote to new customers and expand into new markets. A marketing strategy gives you more control and allows you to diversify your sales channels. A strategy can also help you to form goals based on a . My colleagues create a market entry strategy based only on solid and verified data. Consequently, fast growth is heavily linked with low prices, and the more reasonable they are, the higher the impact will be. For example, if your organizations primary source of income is selling through retail outlets, it can open other channels like email marketing, telemarketing, etc. Otherwise, it would be very difficult to precisely target and narrow down your target customer market. Bedford Square Market development strategy falls under the category of business growth strategy, and it means introducing new existing and current products into the new market. The new market may be a foreign market. The cost of implementing the strategy depends on the ambitions and current state of the banks IT. It's a clear signal to investors that the bank is developing its digital services. Human beings are very creative and theyre curious to learn new ways to get the job done. Understanding Market Penetration Strategy, Market Development vs. Market Penetration, Identify the need for a new product and launch it, Purchase a small business or competitor in your industry, Marketing Communication: Meaning & Types of Marketing Communication, Penetration pricing explained with examples and case study, What is Marketing? 1. 2. Increase Usage Market penetration can be increased through product consumption. The absence of a clear vision of and plan for integrating a fintech into a legacy structure may not bring the desired effect. Then it builds its ecosystem out of them. Social media and digital marketing campaigns allow you to precisely target your customer market. No longer was their tool just another group messaging platform, it was for businesses who want to streamline and save costs with , The infamous ride service app, Uber, has seen significant growth in the last decade through a unique combination of diversification strategy (i.e. They can help you reach new markets and increase sales. 2. Business growth: Market segmentation provides businesses with insight into different markets and . However, even if the company is not spending money on purchasing other companies and is starting to develop an infrastructure instead, I've found that building a large-scale platform can cost hundreds of millions of dollars. However, after conducting a market penetration study, the firm understands it has only a minor market presence among male consumers. Keep your entire team involved so you can hear feedback from many levels. The platform keeps on growing with its existing product. However, when you reach the stage of taking higher risk, then market development is a suitable strategy at that point. Looking at the image above, we can see that market development strategy is a business growth strategy that involves adding existing products to new markets. Market development is an expansion strategy, which identifies, develops and markets new product segments for existing products in the target market. Advantages and Disadvantages of Market Penetration Strategy/Pricing. To encourage more potential customers, market development employs various details or action plans. How Much Will a Company Invest in Its Product as it Moves Through the Product Life Cycle? The focus of the market penetration is to sell the current product stock to the existing market. The company kept on experimenting with new strategies with each new market. Marketing strategies provide you with information that you would not have access to otherwise. The market strategic campaign allows you to promote your business and spread your brand awareness. Another example of market penetration is the online retailer Amazon. Do you have sufficient resources and investment to enter into the new market. Fixed costs don't change with the number of units you produce, whereas variable costs do. Traders often easily adhere to the strategy by controlling their emotions. If you find out some emerging segments in your market, then you should carefully consider these points; A new demographic market means studying a specific segment of the population and targeting it. ride sharing, luxury upgrades, etc. Creating a marketing strategy will help you discover what makes you different so you can map out a clear strategy to communicate those benefits. This button displays the currently selected search type. Being an entrepreneur you to deal with many challenges and make small decisions, and those small decisive steps would determine the success of the organization. If youre not sure how often to calculate market penetration, consider doing it after every marketing and sales campaign. This differentiation in the market has set them apart from other products with very similar features. So, business expansion usually requires funds, especially if the company plans to develop a new niche. Creating a marketing strategy will allow you to take a step back for a moment. If your data collection team have got biases towards the subject or the people, then you wont get accurate results of your findings. The approaches to building an ecosystem can differ: 1. market penetration-, (Number of Customers / Target Market Size) x 100 = Market Penetration Rate. If you have a sales team, increasing their activity can help increase market penetration. Market Penetration can be increased through initiatives such as advertising, new product development, and expansion into new geographical areas. This will allow you to quickly enter the market and gain market share. It now also integrates with many other popular SaaS products such as Dropbox, Zendesk, and Zapier to ensure ongoing growth and user adoption. Offering discounts is a popular way to lower the price of a product or service. When expanded it provides a list of search options that will switch the search inputs to match the current selection. Executing successful marketing strategies often takes time, money and resources and for a small company especially, that can be frustrating. They should consider all pros and cons and look at the successes and failures of their competitors. Or, companies target different segments for their products. However, you could attract the customers of your competitors by differentiating your products in terms of features, price range, or customer support. Activities, Tactics & Style, What is Incident Management? Use tab to navigate through the menu items. (Definition and Examples), These decisions may feel small when they involve things like, Weve previously taken an in-depth look at, Looking at the image above, we can see that market development strategy is a business growth strategy that involves adding, Market development vs. market penetration, 1. Market development strategy helps companies and businesses to approach new customers in a properly planned way. When you focus on those weak growing areas, it would amplify your growth in the long term. It also targets prospective buyers in new segments or new niches. When a company penetrates the market, it shows that they are dedicated to its product or service and are willing to invest in it. To calculate market penetration, you need to know two things: 1) the size of your target market, and 2) how many people in that target market have purchased your product or service. Image: Marketing Strategy Advantages & Disadvantages. 1. Advantages and disadvantages of a marketing strategy, Structure of the international marketing plan, Online Marketing | Types | Characteristics | Advantages | Challenges, Different Approaches to study of Marketing, Products and Services | Meaning, Definition, Differences, Objectives or benefits of marketing research, 5 Important Criteria for Selecting Newspaper Advertising, Commodity Boards | Functions | Kinds of, Advantages and Disadvantages of Questionnaires, How to choose best agency for International, Price skimming | Conditions | Advantages |, Quality Control | Objectives | Methods |, Accountlearning | Contents for Management Studies |. Economic Advantages Definitely, its a responsible call, but market penetration can bring cost advantages if your business development goes the way you predicted and hoped. This could involve setting up new offices, opening new stores, or expanding your distribution network. Now, you have to find out the users of your products, so that you could target them by offering them your product. In both cases, dont overdo it because it may seem suspicious (lowering prices too much may indicate to low quality and high prices might seem as a company that has only one objective-gain profit) and might make customers doubt your quality, fairness, and trustworthiness. Low prices that guarantee customer base growth, means that you can increase the quantity of products ordered from the supplier, which will result in higher profits gained from low prices. For instance, you cant market pork and pig meat in Muslim countries. However, product development can also be risky, drawing your energy away from business activities that are tried and true. Disadvantages of Market Penetration Strategy. Definition, Types and Importance, 6 tactics for Market penetration strategy, Commercialization Definition, Process and Strategies, Promotions in Marketing Marketing promotions, The Importance of Marketing to Businesses, Mass marketing definition and explanation with examples, The Objectives Of Marketing Explained in Detail, JioMart launches its Digital-First Holi Campaign targeting Sale from 1st to 8th march, Tata Groups talks over $1 billion Bisleri stake stall, Goodbye Vistara Airlines! Market Penetration is best used when a business wants to grow its sales in its current market. Most recently, Liz has been writing about accountants working in the cannabis industry on CPA Trendlines and reporting on cannabis trends for Southern Oregon Good Herb magazine in Oregon. After finalizing the target segment, you should develop a promotional strategy to attract new customers. For instance, one thing is acceptable in one part of the world and unacceptable in the other. The BaaS strategy should be considered in addition to classic banking services because its monetization is not always sufficient for development as part of a mono-service. A market development strategy is a business growth strategy that focuses on introducing existing products to new markets. This will show you whether your campaign is working, as well as any changes in penetration. You a specific target market where you havent entered yet of a great marketing strategy is highly expensive investment enter. Is my passion and i have established myself in multiple industries with a large audience who can promote your that... It does this by expanding into untapped market segments have is to find out the new market in... 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Well discuss the advantages of exporting is access to otherwise segmentation provides businesses with insight into different and...