What are market expansion policy?

Posted by Humane Design on September 24th, 2022

A market expansion strategy is a growth strategy in which existing products are sold into a new market when growth in a company's existing sales channels is at its peak. To successfully employ market expansion strategies, your company must first cater to existing markets. Then your company needs to identify other accessible markets.

To expand into new markets, your business must first assess its capabilities and assets. This may include launching new or existing products in new channels that may be lucrative. Then you need to identify new customers and create a message that resonates with them.

Your organization should also fund these new initiatives. Since no sales expansion strategy guarantees success, your organization must accept the risks that come with new initiatives. However, if the strategy of market expansion is successful, sales and profitability will increase company-wide.

Market Expansion or Growth

A market expansion growth strategy, often referred to as market development, involves selling existing products in a new market. There are many reasons why a company might consider a market expansion strategy. Firstly, the competition may be such that there is no room for growth in the current market. Unless a company finds new markets for its products, it cannot increase sales or profits.

A small business may also employ a market expansion strategy as it finds new uses for its product. For example, a small soap dealer selling to retail outlets may find that factory workers are also using their product.