Market development refers to that process that the marketing management of company or an organization undertakes to look for a new market for an existing product. In market development, there is existing product while the market is new. It is a strategic undertaking by the company to attain growth through market expansion. In product development, the management of a company or an organization undertakes to come up with a new product for an existing market. Both market and product developments are important processes for any organization to achieve maximum growth in doing business. However different business environment calls for different marketing decisions.
Major difference between market development and product development lies in the fact that market development is a strategic approach with emphasis in development of new market segments while product development entails to coming up with new product for an existing market. Ray Nilanjan emphasizes on strategic marketing approaches which when applied by any organization leads to growth (Nilanjan, 2015). Among the growth strategies explained include marketing strategic approaches namely market development and product development, a theory by Ansoff. According to Ansoff, marketing strategies, any organization needs to undergo four different growth strategies for it to achieve growth (Nilanjan, 2015). We will however discuss only two: market development and product development.
A product is said to have a life meaning that it has a time when it is introduced into the market and a time when it exits the market. In addition, a product undergoes through four stages of growth starting from the time when it is introduced into the market up to the time when it exits from the market. Product life stages include: introduction stage, growth stage, maturity and finally decline stage. Introduction stage is the stage at which the product is introduced in the market. Growth stage is the period which the newly introduced product takes to grow. Maturity stage means that the product has stayed in the market for enough time. In addition it is a period whereby the customers have gotten used to the product. Decline stage refers to the period in which a product that has been dominating the market starts to lose prominence. When the product nears its decline stage, another product may be introduced into the market to replace it. Exit of one product from a particular market offers an opportunity for another one to be introduced.
Another reason why a new product may be developed is where the management of an organization realizes there is a need for a new product in a market which they are already satisfying with a different product. Customers may give suggestion to the management to develop a new product for them to satisfy their need. Moreover, government may give an incentive to companies to develop for them a new product for example the development of digital decoders in Kenya. Competition may also force a company to develop a new product to compete with the competitor product.
Reasons as to why the management may develop a new market include: A desire by the management of a company to explore new market, in order to achieve growth. In addition to that, the management may find that they are facing stiff competition in their current market. They may therefore decide to counter that competition by exploring a new market for their existing product. Another reason that may lead to market development is customer opinion to have the products brought close to them. For example the chain industries like supermarkets which are spread across various towns though of the same proprietor to reach their customers at various centers.
Moreover a company may discover that there is an already available market for their product and therefore move to utilize that opportunity. Market dynamics calls for different strategic approaches by individual companies to counter them while maintaining steady market growth. Therefore it is safe to conclude that both marketing growth strategies discussed are important in achieving growth for any company or organization. Secondly, the difference between market development and product development is in the circumstances under which each one of them is applied.