How to Create a Market Development Strategy: 7 Tips and Examples

Expanding into new audience markets is a key initiative for the majority of businesses. By reaching out to fresh markets, you open up new revenue streams and avoid relying totally on your existing customer base for revenue. This approach is commonly known as market development, and it’s a key part of your long-term business growth.

Think about it this way: the more you expand your target market, the more stable and resilient your business becomes, especially in competitive or fluctuating environments.

Here is more on the definition of market development, how to create an effective market development strategy, and a few examples of the approach competitors have taken within their marketing strategies. Plus, you’ll learn the difference between market penetration vs. market development and how to use both in your business.

What is market development?

Market development. The concept is all about finding new ways to reach untapped customers and introducing them to your products or services. Rather than creating something entirely new, market development enables you to find new opportunities to grow by expanding into different regions, customer segments, industries, or demographics that you may not have gone after before.

The goal of market development is to tap into fresh demand and drive growth by reaching people or segments you may not have targeted yet. Essentially, it helps you diversify your customer base and lower the risk of relying too heavily on one specific group or market.

It’s important to note that market development is different from other business growth initiatives like product development or diversification. A product development strategy focuses on creating new products for your existing market. Diversification, on the other hand, involves creating new products for new markets. Where market development differs is by focusing on your current offerings but introducing them to a broader or entirely different audience.

Remember: it’s all about maximizing the potential of what you already have by finding new opportunities to sell it.

Market Development Strategy: 7 Tips

To ensure your market development approach is effective, it needs to include a few key components. Below are the seven steps in creating a market development strategy, as well as how to identify target audiences and set SMART goals for growth.

1. Research Your Development Opportunities

Before you start creating your market development strategy, you need to thoroughly research potential opportunities. Look at different regions, demographics, or industries where your product might be a good fit. Be sure to look at the competition, demand, barriers to entry, or any other obstacles that might hinder your ability to sell to this audience. Use tools like customer surveys and market reports to gather insights that can help you determine whether or not expanding into a new market is viable.

2. Identify Target Audiences and Conduct a SWOT Analysis

To ensure you’re focusing on the right people, you need to identify target audiences who will benefit from your product or service. Consider creating detailed buyer personas where you look at factors like age, income, needs, nationality, location, and preferences. At the same time, you may want to do a SWOT analysis—identifying strengths, weaknesses, opportunities, and threats. Doing a SWOT analysis helps you better understand not just where your product fits but also where you may face challenges in a new market. Market mapping can help with this, too, as it helps you visually analyze and understand your market’s structure and identify opportunities for business growth.

3. Establish Your Growth Goals

After you’ve gathered your data, it’s time to set clear growth goals. A good rule to follow is to use the SMART framework—specific, measurable, achievable, relevant, and time-bound. For example, rather than saying “expand into new regions,” a SMART goal would be “to increase revenue by 15% in the Midwest market by the end of Q3.” Following the SMART framework gives your strategy focus and direction.

4. Allocate Resources

Expanding into new markets requires significant resources—whether those resources are money, time, or manpower. Before you move forward, ensure you have the right resources in place. You may need to hire new team members, increase production, or allocate a portion of your budget for marketing and logistics. Having the right resources in place helps you set the foundation for a smooth rollout.

5. Develop a Marketing Plan

Once your resources are in place, the next step is to develop a marketing plan. Your plan should clearly target the specific audience (or audiences) you identified earlier and outline how you’ll reach them. Whether you use social media or paid advertising, your marketing efforts should speak directly to the new market you’re entering.

6. Push Your Product Live

Now is the moment of truth—pushing your product live. Timing is crucial, so be mindful of the best period to introduce your product. Consider starting with a smaller or more controlled launch to see how your new audience reacts and then fine-tune your approach before scaling up. Remember, it’s important to be flexible and adjust based on feedback.

7. Analyze Feedback and Make Adjustments

Once your product is on the market, regularly analyze the results of your launch. Are you meeting the SMART goals you made? Are you reaching key KPIs like revenue growth or customer acquisition? If something isn’t trending the right way, tweak your strategy. Market development is an ongoing process that requires constant monitoring and adjustment to be successful.

Market Development Examples: 3 Companies Who Used the Approach

Now, let’s look at actual market development examples used by real businesses.

1. Netflix’s Global Expansion

When Netflix wanted to take its streaming platform outside the U.S., it did so by expanding into international markets like Europe and Latin America and Asia. To boost its chances of success, it invested in localized content and made its platform available in multiple languages. It also ensured its offerings were suited to each region’s specific tastes. Doing so enabled Netflix to rapidly grow its customer base and successfully go international.

The takeaway from Netflix’s market expansion comes from the success the company saw by deeply understanding its local markets and customizing its offerings based on those unique insights.

2. Tesla Moves into China

Tesla’s market expansion focused specifically on China, a high-growth market for electric vehicles (EVs), and strategically invested in the region. By building a Gigafactory in Shanghai, for instance, Tesla reduced population costs and gained quicker access to Chinese customers. Tesla also adjusted their product offerings to meet specific local preferences, including unique designs and charging infrastructures.

Tesla’s expansion in China was highly successful because the company got close to its new market and ensured it understood its customer needs before launching its products.

3. Coca-Cola’s Changes Up their Products

Finally, Coca-Cola really expanded its market audience by introducing new drinks beyond just soda. They began offering water, tea, juice, and even sports drinks to reach their health-conscious consumers in both existing and new regions. By switching up their products, Coca-Cola was able to attract new customer segments while staying relevant to their soda-loving consumers.

The takeaway from Coca-Cola’s product diversification is that by expanding your product lines within familiar territories, you can open up new customer segments without alienating your core audience.

How is Market Penetration Different From Market Development

Another key part of successful market development is understanding how market penetration and market development are different from each other. Both are growth strategies, but they each focus on unique approaches.

Market penetration looks to increase your share in your existing markets by selling more of your current products to your same audience. You can do this with competitive pricing, with marketing campaigns, by improving your product features to attract more buyers, or by focusing on or improving your word-of-mouth marketing. The approach is most effective when you already have a strong presence in your market and have room to grow without changing your core products.

On the other hand, market development is all about reaching new markets using the products you already have. This can be done by targeting new geographic markets, customer segments, or industries where your product isn’t popular yet. Use market development to maximize your current market and when you’re looking for fresh opportunities to drive business growth.

More simply: market penetration deepens your existing presence while market development broadens your audience reach.

Where Does Effective Market Development Start? With Good Planning

The key to a successful market development strategy? Thoughtful planning, strong execution, the ability to adapt to new challenges, and the flexibility to adjust your approach. If you’re just getting started, it’s crucial to fully understand the new markets you’re aiming to enter. This is where research comes into play. It’s the foundation of any successful strategy, so take the time to look at everything from local demand and competition to cultural factors and economic conditions. With a clear picture of the market environment, you can easily tailor your approach and ensure your product fits the needs of your new audience.

Remember, one of the most important steps in implementing a market development strategy is to keep your communication clear and concise—both internally and externally. Everyone on your team should be aligned with the goals, timelines, resource allocation, and tactics of the strategy, and this requires thorough documentation. From defining specific growth goals to assigning responsibilities, a well-documented plan helps to prevent misunderstandings and keep everyone accountable.

Clear communication with your external partners is just as important. Whether they’re suppliers, distributors, or marketing agencies, everyone needs to be on the same page to avoid delays or missteps that can cost you more time.

Another piece of practical advice: invest in the right tools. Tools like customer relationship management (CRM) systems, market research software, analytics platforms, and even reviews software like Podium can help you streamline everything from audience targeting to tracking KPIs. These tools can also help you gather data, monitor progress, make informed decisions quickly, and adjust to new insights as needed. For instance, using analytics software to assess your performance in real-time enables you to spot trends or issues early on, so you can adjust your approach as needed.

Finally, remember this: no matter how solid your market development plan is, the market will change, and you’ll need to be ready to pivot. Maybe the initial feedback from your new expansion wasn’t as positive as you expected, or maybe unforeseen competition entered the market—both of these are natural hurdles. What matters is your ability to quickly and effectively respond to them. Building flexibility into your plan from the beginning—whether it’s adjusting product features or shifting your marketing tactics—can make a huge difference in long-term success.

Ready to take your business to the next level? Podium is the tool to help you create a winning market development strategy. With tools that streamline communication, gather customer feedback as well as provide valuable insights, Podium makes it easy to understand your new markets and connect with your target audience. From managing leads to tracking performance, Podium gives you everything needed to expand your reach and grow your customer base.

Don’t leave your market development to chance—use Podium to achieve real, sustainable growth. Start building your strategy by watching a demo today.