How to Use Research to Build a Market Growth Strategy
In this blog post, learn the different approaches to building a market growth strategy and how quantilope can help.
Table of Contents:
- What is a market growth strategy?
- Examples of market growth
- Research in market growth and development
- Build an effective market growth strategy with quantilope
What is a market growth strategy?
All businesses need to grow in order to thrive. If they remain stagnant, they will be at the mercy of ever-changing market conditions, whether those are challenging economic climates or innovative competitors.
There are four main business growth strategies that an organization might employ depending on its goals and life stage (originally defined by Igor Ansoff in his Ansoff Matrix):
Market penetration: expanding a customer base by reaching new customers in existing markets; looks to increase sales by enticing customers away from competitors.
Market development: bringing existing products to new markets; looks to sell to customers in unexplored markets who have not yet been exposed to the product (or possibly even the category).
Product development: improving existing products or launching new products.
Diversification: moving away from an existing category into an entirely new product or service territory.
While each strategy is beneficial in unique ways, it really depends on the specific business need a brand is trying to solve with its growth strategy. Market penetration and market development strategies work around a business’s solid existing offer - one that has already proven to be successful with customers and therefore might be considered lower-risk initiatives.
Meanwhile, product development and diversification strategies both look to achieve growth by introducing new products to a market. With these latter two approaches, there is less background knowledge and more uncertainty on how receptive consumers will be toward these new products, yet that could be exactly what a business needs to accelerate growth.
Examples of market growth
There are two main types of market growth:
As the name implies, this tactic encompasses finding new geographical territories for your product. Spreading your reach across areas - whether domestically or internationally - means not only an increase in revenue but also a safety net if times get tough in one or more markets.
You might also consider this type of expansion if your product has reached maturity in its current market. Think of brands like Ikea, which originated in Sweden almost 80 years ago and has since burgeoned into a multinational conglomerate. People always need plates and candles, regardless of where they live.
Target market expansion
A brand that starts off by focusing on a specific set of demographics might soon find that its offer is also relevant to a different demographic profile - or that the existing customers are no longer interested but a new group of customers is. These scenarios call for target market expansion: marketing and selling to new market segments.
Facebook is one such brand that started small - limited to college students only - before its customer base quickly became expansive. In time, as other social media platforms gained in popularity, the younger demographic turned away from Facebook while older demographics took up an interest in the platform. This in turn reduced the popularity of Facebook amongst its original younger audience but opened doors for a whole new market.
Another way to expand a target market is not so much focused on the people, but on finding new uses for existing products. Consumers themselves often lead the way in idea generation: for example, a lipstick that consumers double as a blush, a husband borrowing his wife’s face cream, using club soda for cleaning, etc. As a result, communication can be adapted to promote the product in line with its various use cases and appeal to a broader audience. One prime example of this is Bubble Wrap - which was originally intended as 3D wallpaper but whose sales reached unexpected heights when it was marketed as protective packaging.
Research approaches for market growth and development
Below are a few ways to approach researching a market in order to grow and develop a business strategy:
demographic profiles of the target audience
cultures and lifestyles that help contextualize consumers in the category
usage, needs, and attitudes of consumers within the category
who the decision-maker is in the category and what their spending habits look like
Category landscape research
whether the category is growing, stable, or wavering
key trends in the category
main brand players in the category
whether there is room in the category for a new entrant - and how you can ensure a competitive advantage
Marketing opportunity research
product positioning tests; which product benefits drive purchase decisions
communication testing; which marketing messages resonate the most
what consumers’ implicit associations are of the brand and its close competitors
where consumers get product information (social media, email, recommendations, etc.)
differentiation in offers (what are the most important features, benefits, pricing, communication style, messages, etc.)
Product offer research
what will the product’s price point be, and is it sustainable
whether any product development will be needed in time, based on usage and trends in the category
projected market share of your new product
which distribution channels will optimize sales and have the furthest reach
which business lines will help bring the product to market - suppliers, sales reps, logistics, etc
Build an effective market growth strategy with quantilope
Taking your product or service to a new market is not without risks, but with the right research and planning, you can confidently grow your business.
quantilope’s suite of quantitative and qualitative research tools cover the entire spectrum of market research needs, helping businesses prepare to go live in a market and providing support once they’re there. The avenues of research mentioned above can all be addressed by quantilope’s research solutions.
These might include:
quantilope’s qualitative video research solution (inColor) to gain initial perceptions of the category or detailed, follow-up reactions to your product launch
quantilope’s suite of automated advanced quantitative methodologies such as:
Key Driver Analysis to assess what’s driving current product purchase decisions
Conjoint Analysis to optimize the offer in terms of features and price
TURF Analysis to understand which combination of marketing activities will result in the greatest reach
Market Segmentation to understand which customers to best target based on their needs
A/B Tests to gain reactions to various communication or advertising material
Price Sensitivity Meter to help inform the pricing strategy and profitability
Performance monitoring tools such as brand tracking, to keep tabs on how the market is reacting over time
One of the key benefits of quantilope’s solutions is that they can be activated quickly, with advanced market research delivered in days rather than the weeks it takes with traditional research agencies.
Armed with a thorough understanding of your new market, your insights and marketing teams will be in a strong position to put together a growth marketing plan that will ensure the success of your new offer.
To learn more about how quantilope’s Insights Automation Platform can help accelerate your market growth strategy, get in touch below: