Detail of Market development By Nino

joseph mihilli

Market development is a growth procedure that identifies and grow new market segments for

current products. A market development procedure targets non-buying customers in currently

select segments. It also targets new customers in new section.

A market development procedure need expanding the potential market through new users or new

uses. New users can be defined as: new geographic section, new demographic section, new

institutional segments or new psychographic section. Another way is to expand sales through

new uses for the product.

A marketing manager has to think about the following questions before implementing a market

development strategy: Is it profitable? Will it require the introduction of new or modified

products? Is the customer and channel well enough researched and understood?

In high tech, where discontinuous innovation is the norm, a successful market development

strategy requires crossing the pass between the early market and the main

The Process of Market Development

Market development is a two-step process. It starts with market research. You need to capture in

segmentation analysis to determine which market segments are worth pursuing. A section 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 stab the new market. For example, you

may decide to engage in an militant 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

perforation 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.

Market Development is a 2-step process to tap the untapped market. It begins with market

research wherein a company does a segmentation analysis and short ists market segments which

are worth pursuing. It is an attempt to use the existing product or service to attract new

customers. The goal is to expand the reach or tap into a different segment or unexplored market.

A segment is defined as the small sub-group of a larger population. For example, the marketing

team of the company can divide the market based on geography, demographics as well as income

levels etc. Once the company decides which segment to choose, the next step of market

development involves creating a promotional strategy to enter into the market. For that,

companies may have to take the support of both audio and visual media to push the product

extensive into the market.

Another aspect is the pricing of the product. If there are competitors in the market, you may have

to price the product accordingly or come out with a product which belongs to the same segment

but differs in features, quality etc. to command higher pricing. To counter competition, the

marketing team could look at the piercing pricing where you can aggressively price the product

below competitors product to gain market share. The major challenge faced by firms, which want

to indulge in market development, is that it is a costly affair. It requires huge capital investment

to keep the project going. If the investment in the new segment doesn't pay off as desired, then

the whole exercise turns out to be worthless.

Product development

In business and engineering, new product development (NPD) is the complete process of

bringing a new product to market. New product development is described in the literature as the

transformation of a market opportunity into a product available for sale and it can be tangible

(that is, something physical you can touch) or intangible (like a service, experience, or belief). A

good mastery of customer needs and wants, the competitive environment and the nature of the

market represent the top required factors for the success of a new product. Cost, time and quality

are the main variables that drive the customer needs. Aimed at these three variables, companies

develop continuous practices and strategies to better satisfy the customer requirements and

increase their market share by a regular development of new products. There are many

uncertainties and challenges throughout the process which companies must face. The use of best

practices and the elimination of barriers to communication are the main concerns for the

management of NPD process.

New Product Development Models

Conceptual models have been designed in order to facilitate a smooth process. The concept

adopted by IDEO, a successful design and consulting firm, is one of the most researched

processes in regard to new product development and is a five-step procedure.These steps are

listed in chronological order:

1. Understand and observe the market, the client, the technology, and the limitations of the

problem;

2. Synthesize the information collected at the first step;

3. Visualise new customers using the product;

4. Prototype, evaluate and improve the concept;

5. Implementation of design changes which are associated with more technologically

advanced procedures and therefore this step will require more time.

One of the first developed models that today companies still use in the NPD process is the Booz,

Allen and Hamilton (BAH) Model, published in 1982. This is the best known model because it

underlies the NPD systems that have been put forward later. This model represent the foundation

of all the other models that have been developed afterwards. Significant work has been

conducted in order to propose better models, but in fact these models can be easily linked to

BAH model. The seven steps of BAH model are: new product strategy, idea generation,

screening and evaluation, business analysis, development, testing, and commercialization.

A pioneer of NPD research is Robert G. Cooper. Over the last two decades he conducted

significant work in the area of NPD. The Stage-Gate model developed in the 1980s was proposed

as a new tool for managing new products development processes. The 2010 APQC

benchmarking study reveals that 88% of U.S. businesses employ a stage-gate system to manage

new products, from idea to launch. In return, the companies that adopt this system are reported to

receive benefits such as improved teamwork, shorter cycle time, improved success rates, earlier

detection of failure, a better launch, and even shorter cycle times – reduced by about 30%.These

findings highlight the importance of the stage-gate model in the area of new product

development.

Over the last few years, the Lean Startup movement has grown in popularity, challenging many

of the assumptions inherent in the stage-gate mod