- Review your current business model and target audiences. …
- Think about future goals for your company. …
- Research competitor markets. …
- Complete market research on related product markets. …
- Identify one target market to focus on. …
- Get feedback from existing customer-bases.
How to Expand into New Markets?
What does it mean to expand into a new market and what is the purpose behind it?
To enter a new market means to expand your business by investigating complementary markets or promising niches for your products. To advance your business in one or more ways, you should enter a new market. Here are a few motives for businesses to enter new markets:
How to expand into a new market
To learn how to grow your business into a new market, go over these steps:
1. Review your current business model and target audiences
You may be able to find one or more areas for improvement by reviewing your current business model, product or service offerings, and target markets. You can also assess the kinds of solutions you provide to your clients and consider how you might enhance them to improve their experiences.
An executive team from a large clothing retailer reviews the original business plan for the company. Inspiring creativity and originality in a world of trends is what they hope to achieve, as stated in their mission statement. The executive team determines, following additional deliberations, that any expansion into a new market will be consistent with their original company mission.
2. Think about future goals for your company
You can learn a lot about potential business growth areas from your company’s vision statement. This is due to the fact that you can locate a product market that aids your business in achieving its objectives.
For illustration, the clothing store’s mission statement reads, “To help people show their inner creativity to the world.” Therefore, business leaders might decide to choose goods that support the ongoing expression of internal creativity.
3. Research competitor markets
You can also use your company’s competitors to find new markets to enter. You can do this by examining the goods and services of your top competitors and what sets them apart from other businesses in your sector.
For instance: “Marketing experts and analysts at the clothing retailer spend time reviewing the product offerings for other top retailers in their industry. They find that three of the top five rivals have diversified into the jewelry, designer shoe, and beauty and cosmetics industries.
4. Complete market research on related product markets
Complete market research on a few product markets to comprehend the categories of goods and services provided, the businesses involved, and the consumers who use them. You can use this information to determine which markets are most advantageous for your business.
For instance, market researchers and other marketing experts investigate allied markets like those for cosmetics, jewelry, shoes, and home furnishings. They find that there is a significant concentration of clothing retail businesses in the jewelry, footwear, and beauty industries. However, the number of clothing retailers entering the home furnishings market isn’t as high.
5. Identify one target market to focus on
The market that best fits your business and its long-term objectives should be chosen after evaluating a few potential markets for expansion.
In order to encourage customers to express their inner creativity in more ways than just clothing, the clothing retailer decides to enter the home furnishings market after conducting market research.
6. Get feedback from existing customer-bases
You can set up surveys for emails or website pop-ups that let customers choose what products or services they want to see from your business next to ascertain the perception from your current customer base. This can also help you confirm your new market choice.
The marketing team, for instance, creates surveys using email lists and sends them out, offering loyal customers who complete them discounts on the website. Customers are given a list of products, including furniture for the home, and asked which they would like to see next. They chose to proceed with their decision to expand into the home furnishings market because the majority of their customers wanted to see a home furnishing line.
7. Establish a budget to expand into a new market
When preparing to enter a new market, you must determine how much money you have to devote to the expansion and other resource requirements. This can assist you in deciding which activities you can currently afford and which you will need to make financial plans for in the future.
8. Set a timeframe to expand into another market
The length of time it takes to enter a new market will depend on your financial situation, manufacturing costs, labor requirements, and marketing materials. Whatever the case, by establishing a timeframe, you create a final objective that will guide all expansion activities.
Ex: Executives of a clothing retailer decide to enter the home furnishings market in nine months due to the time required to select wholesalers, supervise product production, acquire additional storage facilities, create product pages, and market new products.
FAQ
How do companies expand into new markets?
The four steps listed below are necessary to grow your business through new market development: Step 1: Identify your new target market(s) Step 2: Conduct market research Step 3: Go into business or find another target market
What does it mean by new markets?
A new market is one where the final product or service is novel; consequently, there may or may not be an existing demand. Space travel is undoubtedly a new market, and SpaceX recently closed a significant financing.
