IOI Partners is an executive advisory firm that excels at helping business leaders improve top and bottom line performance. Our clients are constantly seeking to expand their businesses and improve top and bottom line performance. We help companies of all sizes develop and implement growth strategies, including start-up companies with little or no commercial capability, organizations entering into a new geography, and large established enterprises launching a new product in a new vertical.
Top line growth results from leveraging customer, market and product knowledge, identifying the distinctive capabilities of your organization and positioning them to reach new customers. The strategy for introducing new products and services to the market is aptly called a market development strategy. An effective market development strategy is critical for top line growth. Whether the opportunity is a new product or service, a potential new market for an existing solution or an adaptation of an existing product for a new market, realizing the intended growth is dependent on the robustness of your market development strategy.
IOI Partners can help you to discover and develop opportunities, evaluate legal, regulatory, staffing and financial planning issues and develop a market entry strategy. This may include primary and secondary market research, gap analysis, entry via new entity, acquisition or joint venture, or indirect entry via third party distribution. We then work hand-in-hand with you to execute the agreed market development strategy, ensuring you realize maximum value from your investment.
Researching and Knowing Your Market
Market development activities are often hindered by common challenges, all of which can be overcome through a clear and structured strategy that includes:
- Market Knowledge: Well defined market opportunity including characterization of current unmet user needs
- Segmentation: Accurate market and target customer segmentation
- Market Entry: Rapid market entry through proven sales and distribution channels
- Sales Management: Effective sales qualification and pipeline and management
- Performance Metrics: Effective management of sales and operations performance
Here are some quick considerations to make before developing a market development strategy:
- Is the market attractive?
- Do you have and are you willing to commit the required resources to reach this new market?
- What will it take to serve the needs of this new market?
- What will it take to establish or maintain your competitive advantage in this new market?
Too often companies spend time and money developing a new product and service offering before fully understanding how the new product will be marketed and sold. Consider the following questions if you’re thinking about developing new products or expanding your product line:
- Will your customer benefit from the added value or new product?
- Do you have the skills and capabilities to develop, produce and sell the products proposed?
- Are there regulatory challenges that exist?
- For established companies, do potential manufacturing, marketing, and distribution cost efficiencies exist from an expanded product line? Can you share current costs across the new products or services?
- Can your current assets, brand, marketing, and distribution be used with the new product?
Driving Growth Through New Product Development
After you’ve fully analyzed the market opportunity, have given product development some consideration, and you’ve decided to proceed full steam ahead, here’s how to develop new products and services to meet your market’s needs:
For established organizations
- Add new features or services by extending your current products. For example, diagnostic testing companies at menu to existing platforms, expanding the available market for an existing platform. Here are a few ways to extend your current offering:
- Adapt (to other ideas and developments)
- Modify (change color, motion, sound, form, shape)
- Magnify (more for a higher price, stronger, longer, extra value)
- Reduce (smaller, trial version, shorter, lighter)
- Substitute (other ingredients, processes, power)
- Combine (other options, products, ideas, assortments)
- Develop additional models and sizes of your current products. For example, automated single channel pipettors became automated 4 and 8 channel pipettors to improve workflow and increase throughput.
- Develop totally new products. In this case, leverage your brand recognition. A leader in central laboratory diagnostics testing may expand into point-of-care or a supplier of manual pipettors might expand into automated multi-channel pipettors.
For Start up organizations
- Offer new product attributes that are differentiated and fulfill unmet customer needs. For example, a better quality product, that is less expensive, easier to use, and faster than the competition. Often, these products are based on innovative concepts resulting from customer feedback achieved through primary market research and market segmentation.
Driving Growth Through Expansion of Existing Markets
Established companies can improve top line growth by focusing a market development strategy toward improving existing product line. Possible ways to generate meaningful growth include while focusing on existing product lines are:
Increase Current Customers’ Rate of Use
- Increasing the size of purchase
- Maximizing the rate of product obsolescence
- Finding new uses for your product
- Advertising other uses
- Offering incentives for increased use
Attract your competitors’ customers
You lure customers away from your competitors by establishing differentiation between yourself and them, increasing advertising efforts, adjusting your prices or offering a special service or extended warranty.
Attract nonusers to buy your products
This process can be done by offering strategic introductory offers such as, trial uses of your products, incentives for strategic accounts or targets that offer a reduced introductory rate in exchange for testimonials and written papers highlighting their customer satisfaction. Depending on your market segment and target customer, there are many ways you can tailor your market development strategy to lure nonusers to buy your products.
When you’re thinking about expanding, first think about where you want to cultivate new business. You have options: other regions, nationally, or internationally. Geographical expansion works well for a company that wants to expand its service territory because it needs a physical location to serve its customers. Or perhaps your product is better suited for geography and you seek a product life cycle extension. Either way, geographical expansion will require the same market development diligence as introducing a new product to a new market.
There are many ways an organization can improve it’s top and bottom line. Market Development created by a market driven organization is one proven method to increase an organizations performance. Careful market development planning that starts with uncovering your customer needs and ends with a robust, well thought out plan that is ready for execution can be achieved with the right approach. The fundamental properties that drive the best market development plans will remain useful throughout the course of the product line life and with the right care, will fuel the shared knowledge base of the organization and lead to a much more successful company.
- A Winning Go-to-Market Strategy: How to Launch Strong in Today’s Dynamic Marketplace
- Unveiling Real User Needs Through Conjoint Analysis
- How Market Segmentation and Analysis Can Make or Break Your Launch
- The Market Driven Organization: What Does It Mean and Why Does It Matter?