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4 strategies to grow your business

By Edited Aug 8, 2016 1 1

Marketing Warm-Up Activity

This is a simple activity that will put our minds into business/marketing mode.

First step is to set your cell phone on the desk in front of you and write down 10 features, (camera, customizable ringtones, backgrounds, etc.)

Secondly next to each feature, write down somebody who would enjoy that feature.

Finally, look at your persona list and determine a market for this cell phone.  

Using steps like this can help you reverse engineer the thinking that companies use to cell products.

The Four

Remember that this is all based on the theory of “maximum a customer is willing to pay”. 

Market Penetration - Sell more of the same product to the same customers target market.  Think McDonald's "Super-Size It." This is a low risk strategy because the product is well known and the market is well known.  McDonald’s already knows how the consumers react to its products so if they can get an up sale, they can get more profit. This seems to always work well in a business that has several "levels" of products or has the opportunity to add levels.  Several box retailers also practice this with a "check out challenge."  This is a last minute opportunity for the cashier to push a "sale" product.  These retailers know that 3% of customers will always say yes when asked to buy a product.  Rewards are often given to cashiers with higher than 3% average because this shows they are asking everybody. 

Market Development - This is a strategy that can be harder to develop and goes against a lot of marketing principals.  This is to develop a new market for your current product.  So if we make cell phones, we could develop cell phones for the elderly or children, with the assumption that all others fall into our original market.  This can be touchy because we do know the product but we do not know the market.  There could be reasons that elderly or children don't have cell phones that we won’t discover until we try to sell them.  This is where extensive market research comes in handy.  Think about car companies pushing to sell brand new cars under $10,000.  These are marketed toward young adults and college kids.  The research showed that this group of people wasn’t buying cars because they couldn't afford it.  Thus they created a car with the “maximum” a person in this market could afford on a monthly basis. 

Product Development - An even riskier strategy than before; this requires your company to develop a new product for your current market.  Think of a company that makes ball caps starting a line t-shirts.  There is a reason that that your current market is there and that is your original product.  It is difficult to develop a product for a customer base that is there for a different reason.  Think about when McDonalds started selling pizza.  It was risky because their customers wanted burgers and fries, but they also wanted family dinner.  Thus pizza started to make more sense.  This failed quickly because the families who eat there wanted fast family food.  Pizza is not for the fast food environment because it is hard to make ahead of time.

Diversification - A new product and a new market.  Imagine this as Pizza Hut opening a chain organic health food stores.  They don't have any experience in grocery stores or the health food segment.  This is the riskiest strategy of all and rarely pays off.  GE is one of the only companies to successfully diversify.  GE makes everything from kitchen appliances to jet engines to wind turbines.  If you are planning on using this strategy than make sure you have the capital to back it up.  Also make sure you have done your research into the market and product.  Many companies fail using this strategy because they do not have the resources or money to invest fully into a new market and a new product. 



Dec 6, 2011 1:25am
This was really interesting. I'm not really much of a marketer and would like to do better.
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