Today, competition among new businesses is fierce. Although most people start businesses not with the goal of making money in mind, in order to become a sustainable entity the company needs to turn a profit. This means that the person or people starting up the business need to have very clear strategies in place for the brand growth of their organisation.
There are four ways to strategise for brand growth. These are the following:
- Increase the share which you hold in the markets that you are strong in,
- Develop new products and services for those markets,
- Extend your reach by discovering new markets for your current brands, and
- Develop new products which cater to new markets.
The brand growth strategy matrix is a straightforward way for visually which represents the options a business can use in order to enhance its market growth. The matrix looks at two dimensions:
- Products, as well as
This strategy considers if they are new or existing and results in four separate growth strategies:
- Market penetration (current market and product),
- Market development (new market and current product),
- Product development (new product and current market), and
- Diversification (new product as well as new market).
The market penetration strategy is the most cautious growth strategy however it is also the most challenge. It is conservative as it relies on a current market in addition to current customers. This means that there is a slight risk of failure however it is also challenge to achieve growth through this strategy as you must depend on a limited market without having anything innovative to offer. In order to attain greater market penetration, a company will be required to sell more to the current base of customers.
The market development strategy is marginally riskier. It includes taking a current product and finding a new market for it.
There are two kinds of market development:
- Demographic, as well as
Establishing a new demographic environment includes finding new customers in the same geographic area. Geographic market development includes expanding to a new area, for instance exporting products to a brand new country.
Product development is basically the reverse of market development. Instead of creating a new market for a current product, the company develops a new product for an existing market. The risks inherent in this strategy are slight as the company knows the market. However, developing a new product can be unsure as you are not sure if your existing client base will buy into your new line.
Diversification is the riskiest of growth strategies as this involves designing a new product for a new market. Diversification is risky because here there are a lot more uncertainties than in any of the other growth strategies. A company pursuing this type of strategy must learn about the new market into which they want to enter while at the same time developing a new product for this market.
Developing your brand and growing can be a tricky business. However, when you find a strategy that works for you and your business you’re set to make a roaring success of your venture.
At the Digital School of Marketing, we understand this which is why we’ve incorporated this area of knowledge into our Brand Management Course. If you want to know more about this, as well as other strategies to make your brand fly, please follow this link.
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