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Market Development: Examples, Definition & Process

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  • 0:01 Market Development Defined
  • 0:25 The Process of Market…
  • 1:20 Examples of Market Development
  • 2:12 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
If you are not growing in business, you are often dying. In this lesson, you'll learn about market development, including what it is and how it works. You'll also have a chance to take a short quiz after the lesson.

Market Development Defined

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.

Examples of Market Development

If you look at the commercial world around you, you'll probably notice a lot of market development going on. Here are a handful of examples:

A consumer electronic company notices that individuals aged over 60 do not buy its products even though the products serve unmet needs and wants. The company decides to enter the market through aggressive advertising and product demonstrations at local senior community events.

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