Whatever the stage of your business development, looking at the future may be helpful in defining your marketing objectives and your marketing mix.
The most common objectives are usually to achieve sales and profitability targets in year one and to increase sales and profitability levels in subsequent years. Bearing this in mind, how can you develop your product, service or customer groups to achieve this business growth?
By examining the product/market matrix below you can identify the major classes of growth opportunities:
- Market penetration
This is where you aim to increase sales in current markets by increased marketing effort; that is, encourage existing customers to buy more by using publicity, advertising, special promotions, etc. You can also attract competitors' customers by attractive pricing, aggressive advertising, seeking extra distribution channels, etc.
- Market development
This is where you introduce current products to new markets; for example, into different regions, countries or a new market segment. This can be achieved by seeking different distribution channels, different media advertising, or offering product ventures that appeal to each new market segment; for example, financial software for banks repackaged for accountants.
- Product development
This involves developing an improved product for existing markets, eg:
- Adding new features, highlighting other features or removing some altogether.
- Producing new quality ranges, eg standard, extra and super versions.
- Introducing new models or sizes, eg mini, midi, maxi.
This involves identifying opportunities for new products in new markets, which will help achieve the business objectives; for example:
- Adding new products that are technologically related to existing ones and will appeal to new customers.
- Adding new products that are unrelated to your existing products and might appeal to new customers.
Producing a marketing plan is crucial. It is the point at which your preparation work is combined to create an action plan with the aim of taking those first important steps towards establishing a presence in your new market. Clearly, care and attention to detail is vital if you are to ensure that you are fully prepared. Producing a marketing plan is a fairly lengthy and detailed process and should not be rushed or treated half-heartedly if the risk of making expensive mistakes is to be avoided.
Nonetheless, you should retain a reasonable degree of flexibility within your plan. It is impossible at this stage to foresee all possible outcomes and, as experience will eventually confirm, there are always those customers who represent a worthwhile opportunity but unexpectedly want something to be slightly different. This is where, as a more adaptable and responsive small firm, you have an advantage. With the ability to adapt and respond quickly you will be in a position to grasp such opportunities where others may miss out.