3 Business Growth Strategies for Existing Product Markets
Existing product markets are often attractive growth avenues. For many businesses, existing product markets are the ‘low hanging fruit’ when it comes to increasing sales — both new and repeat.
An established firm typically has a base on which to build, which means it is easier for momentum to be exploited. Also, the firm may have experience, knowledge, and resources (including human resources) already in place.
This two-pronged strategy isn’t the ‘Holy Grail’ for businesses looking to increase growth, but it certainly is the cornerstone.
Here are three growth strategies to put to use for your business:
- Increase Market Share Through Competition. Although it is usually easier said than done, the most obvious way to grow is to improve market share. A share can be based on tactical actions such advertising, trade allowances, promotions, or price reductions.
One of the greatest challenges to increasing share is that the share gain obtained by such means can be difficult to maintain and can also be expensive and unprofitable (at least at first).
The most prudent way to obtain share is by developing a sustainable competitive advantage
. This can be done by increasing the perception of value to the target market, or at least neutralizing the competition’s.
- Increase Product Usage With Customer Segmentation. When developing programs to increase usage, it is useful to begin by asking some fundamental questions about the user and the consumption system in which the product is embedded.
Why isn’t the product or service used more? What are the barriers to increased use? Who are the light users, and can they be influenced to use more? What about the heavy users?
Even though heavy users are usually the most fruitful target, light users should not be ignored because there may be a way to unlock their potential.
- Increase the Frequency and Quantity of Use With Communication. For some contexts, awareness, or recall of a brand, is the driving force behind frequent use. People who know about a brand may not think to use it on particular occasions without reminders. But sometimes, branding isn’t enough.
A business looking to increase the frequency of use of its product or services has a couple of options at its disposal: remind customers to use the product or service more, position the product to be used more often — for example, a skincare company can increase usage of its moisturizer with a “twice-a-day” ad campaign — provide incentives, make the product or service easier to use, and reduce undesirable effects of frequent use.
Growth can be achieved in existing product markets by increasing share through capturing sales held by competitors and increasing the product usage among existing customers — both in frequency and in quantity.
For more information on how the Onisko & Scholz team can help you develop sound business growth strategies, contact us today
. Or call 562-420-3100