The document discusses market development strategy and provides examples of Coca-Cola and Uber utilizing this strategy. It notes that market development involves gaining new customers for existing products in new markets, which can increase revenue but also carries risks if the new market does not provide profits. Coca-Cola acquired Costa Coffee to expand into the $1.5 trillion coffee market. Uber operates with low costs by taking a small cut of fares from drivers who use their own vehicles part-time.

1. DIPANJAN ROY
MARKET DEVELOPMENT
STRATEGY

2. ADVANTAGES
The advantage of Market Development includes:
 Gaining the new customers for the existing product
 Increased revenue for the company
 Increased growth tend to have very profitable
reinvestment opportunities

3. DISADVANTAGES
The disadvantage of Market Development includes:
 Risk associated with the market development
strategy because we don’t know whether the new
market will give profit or loss to the company
 It requires capital investment in expansion to build
new locations
 It can still prove to be an unsuccessful strategy for
many organization

4. EXAMPLE OF MARKET DEVELOPMENT
STRATEGY (COCA COLA):
 On Aug. 31, Coca-Cola had acquired Costa Ltd. for $5.1 billion.
 Today, Coca-Cola competes in a category valued at
approximately $0.8 trillion. With the addition of Costa, that
opportunity will grow to $1.5 trillion.
 Coffee market are categorized into four segment, out of that
COCA COLA only competes in the ready-to-drink segment.
 “Costa Coffee is the largest global coffee shop chain globally
after Starbucks and McCafé,” said Howard Telford, head of soft
drinks at Euromonitor International.
 Over the last five years, almost $20 billion in growth from
specialist coffee shops globally.

5. • U B E R T A K E S A V E R Y S M A L L C U T R A N G I N G U S U A L L Y B E T W E E N
5 T O 2 0 % .
• I T D O E S N O T H I R E F U L L T I M E R I D E R S O R R I D E S B U T U S E S T H E
N E T W O R K I N G E F F E C T T O G R O W I T S N U M B E R O F D R I V E R S .
• A N Y O N E W H O O W N S A V E H I C L E A N D C A N D R I V E C A N B E C O M E
A D R I V E R F O R U B E R A N D E A R N M O N E Y W O R K I N G P A R T T I M E .
• S O , T H I S A L L O W S C O S T C U T T I N G O N I N F R A S T R U C T U R E A N D
M A I N T E N A N C E .
• I N T U R N T H I S B E N E F I T C A N B E P A S S E D T O B O T H D R I V E R S
A N D R I D E R W H I C H A L L O W S U B E R T O C H A R G E L O W E R C O S T S
A N D W I T H O U T I N C U R R I N G A N Y F I N A N C I A L L O S S .
• T H E D R I V E R S A R E E A R N I N G E X T R A M O N E Y A N D T H E R I D E R S
A R E G E T T I N G T O P A Y L E S S A N D H A V E E X T R A C O N V E N I E N C E .
T H I S I S H O W T H E C O S T L E A D E R S H I P A D V A N T A G E I S W O R K I N G
• I N T H E F A V O U R O F U B E R A N D H A S M A D E I T S P O P U L A R ,
P A R T I C U L A R L Y I N T H E M E T R O P O L I T A N A R E A S . C O S T
L E A D E R S H I P C A N B E A S O U R C E O F S U S T A I N A B L E
EXAMPLE OF MARKET
DEVELOPMENT STRATEGY
(UBER)

6. QUESTIONS
 what are the major segmentation strategies followed
by the marketing executives?
 what are the factors need to be considered while
promoting existing product to a new market?
 what are the various risk factors faced while entering
a new market segment?
 Whose decision is critical for success of new
venture?

7. ANSWERS
 what are the major segmentation strategies followed by the marketing executives?
Concentration strategy: This kind of segmentation strategy deals in a particular segment of market
and therefore they set their prices, etc accordingly. For eg Mercedes benz has chosen to concentrate on the luxury
segment of the the car market.
Multi segment strategy: This kind of segmentation strategy focuses on more then one different
market segments. They make separate marketing programs for separate segments.
 what are the factors need to be considered while promoting existing product to a
new market?
current stage in the product life cycle
brand differentiation
 what are the various risk factors faced while entering a new market segment?
huge investment
product pricing and promotion
ability to withstand initial failures
Gaining market share
 Whose decision is critical for success of new venture?
Market developer