Entering new markets can be quite an extensive process when you consider everything involved—from market research to localization and beyond. But expanding within a new or existing market is another beast entirely. How should you go about it?
Assessing market readiness for expansion
We’ll get into the various market expansion strategies you can use shortly. First, let’s briefly discuss how you know when it’s time to expand in the first place. There are many scenarios that might justify market expansion:
- Market saturation, meaning that your company has peaked in terms of generating awareness among your target customers and driving sales
- Declining sales, which may indicate a waning interest in or need for your offerings within your current market
- Fierce competition that is increasingly and/or rapidly cutting into your revenue and profits within one market
- Untapped markets that lack the products or services you offer (or that are underserved by companies similar to yours that operate in those markets)
Do any of the above fit your situation?
5 market expansion strategies to consider
Several strategies can help you expand successfully, whether you plan to do so in response to challenges like rising competition or just spot new opportunities within a market. These can be used solo or in combination with one another.
1. Scale distribution and supply chain
One thing you can’t afford to drop the ball on in the midst of market expansion is ensuring that you can efficiently and cost-effectively serve your customer base. You might need to do any of the following:
- Optimize production processes (and things that impact production like warehouse layout) to enable increased production.
- Automate processes to boost efficiency and reduce the risk of human error.
- Address existing or potential inventory management issues to prevent under and overstocking.
- Secure distribution centers in more strategic locations so that shipping costs and delivery times don’t get out of hand.
- Making sure you have the infrastructure to support your expansion should be a top priority before you undertake any of the other strategies below.
2. Diversify product or service offerings
There are a number of methods of diversification you might consider:
- Introducing new products or services that meet the wants and needs of your target market
- Extending the use cases of current products or adding features
- Adapting existing products or services to meet the needs of new market segments
- Acquiring or merging with companies that offer adjacent products or services wanted or needed within your target market
- Localizing existing offerings so they have greater appeal for potential customers in the local market you’re focusing on
A good example of the latter is the expansion of InterContinental Hotels Group (IHG) in China. The internationally known hotel brand entered the China market in the mid-1980s. Yet, it wasn’t until 2012 that the company launched a subsidiary of its brand—HUALUXE™ Hotels and Resorts—designed specifically for the Chinese consumer. This launch thereafter helped IHG outperform its competitors in Greater China.
3. Leverage different marketing channels
Sometimes, a key to successful business expansion is simply expanding the channels you use to reach potential customers—whether online or offline. Of course, it will take research on your part to figure out what channels would enable you to reach the largest percentage of your ideal customers.
While the channels competitors are using can provide some insight into this, dig deeper. This could mean polling members of your target audience to see where they prefer to interact with brands or learn about products or services interesting to them. Or generally keeping an eye on your target market’s behaviors (e.g., areas they frequent where you could display outdoor advertising, social media channels they’re active on, etc.).
4. Build region-specific campaigns
Using IHG as an example, we talked about the value of localizing products or services to facilitate market expansion. But you can and should also develop localized marketing campaigns to promote those products and services.
A big part of this is translating your marketing materials (or investing in transcreation). But localization also includes tasks like swapping out visuals for cultural appropriateness and relevance, as well as updating currencies or date and time formats. The more native your marketing campaigns feel, the more effective they have the potential to be.
5. Building local partnerships
No doubt, there are complementary but non-competitive companies that serve the same target audience you’re trying to reach. It could be worth developing cross-promotion agreements. This would help you get your business in front of more potential customers and allow you to benefit from the trust your local partners have built with them. In other words, potential customers will trust you more readily and may become customers sooner thanks to the recommendation from a local business they respect.
Monitoring and measuring expansion success
As with any new business initiative, monitoring impact is critical to ensure you get the best return on investment (ROI) possible. To accurately assess whether your ROI is good or not, though, you need predefined goals and key performance indicators.
Of course, your overarching goal will always be to generate more revenue but get even more specific. For instance, is your objective to gain a certain percentage of market share before competitors enter a currently untapped market?
Also, be specific about what key performance indicators and what indicators would constitute failure, success, or stagnancy. Remember that KPIs aren’t just metrics like website traffic, conversion rate, and sales. They can also include things that are harder to measure but important nonetheless. Think audience sentiment and reputation.
Once established, keep tabs on these KPIs and re-evaluate them periodically (at least quarterly). Adjust your goalposts or growth strategy as needed.
Successful market expansion requires ongoing localization
Regardless of how you choose to expand, localization will likely be essential to ensure your efforts are well-received by your potential customers. This is not just a one-time need. As you continue to produce more content to generate interest in your offerings or serve new customer segments, that content will need to be localized.
Handling marketing localization at scale can be a huge undertaking, so you’ll likely need to leverage a mix of translation technology and services to keep pace. This could come in the form of a translation proxy like Smartling’s Global Delivery Network, which automatically pulls new website content into Smartling for translation and allows you to review and publish it to your website or app without any manual work. Or you may need to leverage human translators for specialized translation work or transcreation.
Learning about the ways other brands are scaling content translation and localization can be a great jumping-off point for developing a solution that works for you. In our short ebook, A Translation Solution that Grows With Your Content, we cover five ways many companies are scaling—in many cases, to support market expansion. It’s free to download so we recommend giving it a read!