Posted in Marketing and Strategy Terms, Total Reads: 240
Definition: Market Expansion Potential
Market expansion potential is potential to which a business can be increased in a market. Market Expansion is a strategy of expanding the market size by focusing on different segment of consumers. The potential of a market expansion strategy depends on the size of the new market that a business is trying to enter. Market expansion is usually taken up by the business when they feel the growth in the present market is reaching a saturation and for future growth it needs to expand the market size.
Many strategies can be used for market expansion depending on the nature of expansion that a company is looking into. A framework has been provided by Ansoff for the same in which he has found four key strategies for market Expansion. It is called the Ansoff Matrix.
In Market penetration the company tries to use the existing product and in the existing market but tries to increase its reach to the maximum no. of customers. This is done when a lot many customers are not aware of the service & products of the company.
In Market Development the company tries to incorporate new markets for its existing products. For example a company trying to sell its product in a foreign land in a new market
In New Product development strategy the company tries to develop a new product for its existing markets. For example technology companies are introducing new models (ex. Smartphone) for their existing market.
In diversification the company tries to cater to a new segment of the market with the new products in a new market for example: An airplane company starting its own chain of hotels.