Target markets for any product are not pre-determined! The stakeholders of organizations determine what they consider will be their relevant market.
Going Global: Developing a new market or moving into a new geography can be as lucrative as it is risky. Geographic expansion of an organization can be done in a number of ways. Researching and understanding the business climate (of the country you wish to expand to), the customer buying behavior, consumer spending etc. is not only challenging but also expensive and time consuming. More difficult is understanding the cultural nuances which play a vital role in deciding the adaptability of a product in the chosen market. Estimating the market size, competitive positioning, compatibility, expected growth, and cost to reach establishes the substantiality of the market. The considered market needs to be closely assessed at a grassroot level to understand its alignment to the organization’s mission and it’s expected position to reach and sustain in the chosen market. These efforts will be valuable to an organization when the cost of developing new market is positively affecting its bottom-line and ensuring it’s Return-on-Investment (ROI).
More than Just Revenue: New market potential of different geographies should serve competitive advantages as well as quick growth for an organization. These markets not only serve as additional revenue streams but also are excellent opportunities for Innovation, New-product Development & Differentiation. Adapting to new markets with customization and tailor made products can be a new technique of value creation for the organization.
Value Creation: ‘Sophisticated differentiation allows the creation of new markets’. Differentiation can be achieved through product differentiation or by generating processes that add value to prospective stakeholders. In order to derive key-benefits, knowledge about the current and future aspirations of potential customers should be carefully evaluated. Qualitative methods and analysis can be used to identify these benefits. Generating value for its customers can be conceived from a series of processes adopted by the organization and how well it’s customers are integrated into these processes.
Changing Mindsets & Swelling Wallets: Changing external environments make it challenging to assess a market’s potential. The bigger concern for any manufacturer is to identify the consumer-persona and understand their buying habits. In markets like China & India, consumers are value seekers alike, who constantly are searching for the best deals for their money. However, both these markets have scaled up to embrace big luxury brands and are open to trying-out new things. Strategic utilization of the increasing brand consciousness can be central to an organization’s long-term attractiveness & survival. Since the trust is high, these brands can benefit from the high level of awareness and allure of new markets.