Once a company has maximized its market share in a given market, expanding into new markets allows for greater revenue growth. This requires a comprehensive market expansion strategy to maximize success.
In this guide, we’ll define market expansion, provide a step-by-step guide to expanding into new markets, and provide examples of companies with proven expansion strategies.
What is a market expansion strategy?
Market expansion is the process of growing a business by reaching new customer groups and introducing products and services into untapped markets. Expansion can be geographic (e.g., a U.S. smartphone company expands into Asia) or demographic (e.g., a young adult clothing company creates a new line to appeal to older customers). When a successful company experiences a slowdown in growth, expansion allows it to continue to grow revenue.
While market expansion can pose challenges, a careful strategy offers enormous opportunities, such as:
Economies of scale: New markets offer the opportunity to produce goods more cheaply and in greater volume. Producing and selling in larger volumes can reduce the cost per unit, increasing profit margins.
Diversified customer base: Serving multiple markets reduces the risk of relying on one group of customers.
Access to new talent and resources: Expanding into new markets can connect companies with skilled workers and business partnerships that are not accessible in their home markets.
Increased brand recognition: Expanding into new markets introduces a brand to more people, making it more well-known and trusted.
How to expand into new markets in 8 steps
Companies entering a new target market need to understand the cultural expectations of their target audience while also considering potential changes. They need a flexible and targeted strategy. Here’s how your company can achieve both:
1. Set your goals
Every global market expansion strategy must set clear, measurable goals. Will your company expand its customer base by introducing existing products into a new market? Or will it increase its market share with new products?
Once you’ve decided on your go-to-market strategy, outline the metrics you’ll use to analyze your progress. These are called key performance indicators (KPIs) and can include sales, customer acquisition cost (CAC), market share, or brand awareness.
2. Assemble an experienced team
If this is your first expansion effort, consider building an experienced team that includes individuals with the right experience. This likely includes someone who has worked in a cross-functional role and understands the nuances of a market azerbaijan whatsapp number data 5 million expansion strategy. Experienced individuals will help you navigate challenges, adapt to market demands, and deliver high-quality results.
3. Conduct market research
Once you’ve defined your intentions, you can research your new target market. Market research reveals what people want and how your product or service meets their needs. Study local culture, customer needs, purchasing habits 6 tips for making a and competition to create an effective growth strategy.
Tools like surveys, online polls, and market reports provide valuable data. You can also use your competitors as a resource by studying the strategies they use to reach your customer base. The more data you can gather, the easier it will be to tailor your company’s marketing to reach your target audience.
4. Create a pricing strategy
Your pricing should balance competitiveness with profitability, taking into account the local cost of living, customer expectations, and what japan data competitors are charging. Affordable pricing can attract more buyers and help you gain market share quickly, while premium pricing can position your product as high-quality or unique.
5. Develop a marketing strategy
The next step is to use the information you’ve gathered from your market research to develop a marketing strategy. Your approach should help your target audience understand who you are, what you offer, and why your product meets their needs. This could include promoting new products to increase market penetration or investing in social media advertising to reach a younger audience. A good first step is to localize your website to optimize it for international search engines .
6. Localize your product or service
Your target market research can inform your localization process, helping you adjust your product and messaging to suit the preferences of your new audience. This may include adjusting product features or packaging, translating content to sound natural in the local language, and following local rules and regulations.
Successful localization requires accurate translations that take into account the nuances of the local language. Smartling’s professional translation services match you with a network of 100% native-speaking translators dedicated to your account to deliver high-quality results. You can connect directly with your translators as they translate and edit your content, ensuring your brand voice remains intact. Brands that localize with Smartling get to market faster and form more genuine connections with consumers.
7. Test your strategy
Testing your strategy with a pilot campaign reduces risk before you fully commit to a new market. Start by launching your product or service in a small, targeted area of the market, such as a specific region or customer segment. During this testing period, collect as much customer feedback, sales data, and team observations as possible. Then, use this data to refine your product and marketing strategy.
A pilot campaign allows you to identify and fix potential issues early on, better preparing you for a successful, full-scale launch.
8. Track your progress
The KPIs you choose at the outset will tell you whether your market expansion strategy is working. KPIs might include sales growth in the new market, the percentage of the market your product or service now occupies compared to competitors, or how many new customers you are acquiring and retaining over time.