No company wants to simply maintain its current level of revenue and audience by keeping a static line of products. Using a combination of markets and services, you can identify how your product will help your company grow. Each of the following growth strategies is based on a combination of markets and services. Growth strategies are based on:
Market Penetration: The combination of current products and current market. Your product marketing strategy focuses on increasing your market share and getting existing customers to use more of your product.
Market Development: The combination of current products and new markets. Your product marketing strategy focuses on new audiences and communities with different packaging and pricing.
Product Development: The combination of new products and current market. By listening to your audience you stay ahead of your competitors, developing new and innovative products.
Diversification: The combination of new products and new markets. Your product marketing strategy must clearly define your goals, since your current product is not growing at the rate you need for business to flourish. There are two types of diversification:
Related diversification means you develop (or buy) products that are related to your current offerings. One example is the line of beverages that Coca-Cola offers.
By contrast, unrelated diversification means you create products in a completely new area. For example, Samsung has developed solar panels, bio-tech drugs, medical devices, and more. In fact, their mission statement describes their product marketing strategy: “For over 70 years, Samsung has been dedicated to making a better world through diverse businesses that today span advanced technology, semiconductors, skyscraper and plant construction, petrochemicals, fashion, medicine, finance, hotels, and more. Our flagship company, Samsung Electronics, leads the global market in high-tech electronics manufacturing and digital media.”
There’s one more way to think about diversification: Horizontal (buying companies that are your direct competitors or are directly related to current products) and vertical (buying the suppliers and distributors of your product or developing your own channels). Each of these strategies has risks and rewards, so your decisions should be based on a solid understanding of your audience and your competitors, as well as an examination of your business strategy.