You know it is time to expand your market reach when your sales begin to peak.
Because at that stage, increasing your marketing efforts or increasing the incentives for your salespeople would not bring you any valuable results. The market has reached its capacity for your goods and you simply have to expand.
Now, expanding your market reach is a great way to achieve business growth because it would mean more customers, products, a larger addressable market, etc.
But to achieve this would require a considerable amount of time, effort and money invested.
If you’re ready to make that commitment here are the two core market expansion strategies and how to use them to grow your small business:
- Create New Products or Services – Here the business introduces new products or services to the market they are already operating in. The business usually markets the new product/service to their existing customers by upselling them or in some cases, targets a new group of customers in the same market. The strategy would, however, require that the business has good know of their target customers and is willing to carry out extensive research to understand what the market would respond to.
- Expand into New Markets – Here, the business has to move beyond its existing sales channels and market to new markets in order to expand its reach. It entails adding new sales and distribution channels to reach a new group of customers. If you own a physical store like a boutique, an expansion into a new market can mean opening new stores in a different location or leveraging technology to sell online. Either way you can sell the same products to a new group of customers. But businesses don’t just jump into a new channel or market and start selling – you make that move only after you have done research and it is favourable to that location or channel.
To successfully implement your market expansion strategy, there a few things you need:
- You must be able to research your customers, market, and even competition to determine the best market reach expansion strategy or your business.
- Market reach expansion needs to be financed, but before you make any investment make sure you have established a clear business case in support of the strategy and outline the timeline for a return on your investment.
- Be open to collaborate with partners; complementary businesses, suppliers etc. to reduce your risk and increase your chances of success in your expansion.
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