emerging or new market. It can originate from new technology or new market opportunities (Eliashberg, J., Lilien, G. L., & Rao, V. R. 1997). Literature defines product development as exploiting an untapped market opportunity and turning it into a value product for customer satisfaction. Development and introduction of a new product requires extensive research on understanding customer needs, market structure, emerging trends and analysing the internal & external competitive market environments. To evaluate customer satisfaction previous researches provide strong relationship between customer satisfaction and product quality, product features and value for money. ***
But irrespective of where opportunities originate, when it comes to successful new products it is the consumer who is the ultimate judge (Brown and Eisenhardt, 1995; Cooper and Kleinschmidt, 1987)
Firms sustain their long term position in competitive business environment by continuous research and development and meet the emergent new trends and demands by offering new variant and diversified products.
The consumer electronics industry particularly smart phone industry has extremely short product life cycle. Firms need to develop new products and update the existing ones, in order to meet the changing market demands. The emergent marketing challenges and new technological advancements fosters firms’ need to conduct research and ascertain new strategies, in order to survive and retrain their market position. Firms need capabilities in order to react to the sudden market changes and have a contingency plan to meet the changing market needs. To manage the rapid change in technology and the extremely short product life cycles, the cross-functional cooperation of the NPD process in the IT industry may be different from those industries with a longer product life cycle. Therefore, it is worthwhile to separately investigate these issues.
Product-market expansion strategy:
The product- market expansion grid is used as a tool by the organization for planning purpose. The Apple Inc. can use this tool when they want to increase their sales either by expanding product or by entering a new market. With the help of this grid, market expansion strategy is determined.
• Opportunity: this grid not only provides the opportunity to expand the product but it also but it also provides with the opportunity to withdraw from the current market to another.
• Risk: each grid provides with each level of risk involve with each strategy.
Structure of Product-market Expansion Grid:
The product-market expansion grid consists of two main dimensions that are, Product and the Market. The product dimension can be a new product or existing product and market could be existing or a completely new market.
Market Penetration Product
Fig.1 Product-market expansion grid.
The sequence of these factors is:
1. Market penetration: focus is on existing product and market. Apple can make more sales to current customers without changing much the product.
2. Market development: focus is on existing product and new area of market. Apple can introduce its Iphones in new market where they have not entered before.
3. Product Development: focus is developing new product and offering it to same exiting market.
4. Product diversification: focus is on new product and new market development.
This grid provides with an outline of alternative methods which could be used to achieve the growth object.
1) Market penetration:
This strategy focuses on selling the existing product to the same market to increase profit and sales. This is the very first strategy used by the companies as it involves less risk. The best way is to attract the competitors’ customer and look in the existing market for the other potential customers. Apple can target the business buyers like big organization who offer smart phones to their employees as a reward and also keeping the local market in focus.
Market penetration sells more of the current increase in profit, low risk
product to existing market
For a successful implementation of the market penetration strategy it is necessary for an organization to do detailed research on market and competitors activities.
Market penetration seeks to achieve four main objectives:
a) Maintain or increase the market share of current products.
b) Secure dominance of growth markets
c) reform a mature market by driving out competitors; this would require a more aggressive promotional campaign, supported by a pricing strategy designed to make the market unattractive for competitors
d) Increase usage by existing customers. For example by introducing loyalty schemes.
This strategy is very much about the business which is carried out as usual. In this strategy the marketer is focusing on both the product and the market opportunity.
2) Market Development:
The second strategy is Market development strategy which focuses on selling the existing product in a completely new market. The organization targets the new geographical area, region which share the same demographic profiles than in the home country. The organization does not have to make a huge change in the product nor they have to change their marketing strategies. There are few of the following ways through which this could be done:
I. New Geographical markets: this involves selling outside the region or a country and offering them same existing product. Expanding into new market place with the same existing product is a very effective way to grow the business.
II. New product dimensions or packaging: sometimes for the successful selling of the existing product it is necessary to repackage the product to open the new market. Apple can use different packaging technique according to the different age group of it customers.
III. New distribution channel: Apple should know that if they want to target a big audience they need to use more than one method. The organization cannot merely depend on newspaper and commercial advertisement but also they may need to transform from shop retailers to internet retailers as per the demand of the current need. These days people are more likely to shop online due to the busy life schedule therefore Apple can put their variety of the product online for its customers handiness.
3) Product Development Strategy:
Product development is the other strategy used to introduce a new product in the same prevailing market, product extension and product improvement. This strategy is considered to be risky as it involves new products development and the end means remaining the same that is the market. The business operators need to be engaged in continuous research and development (R&D) and customers need assessment while availing this strategy.
The phone models are being replaced after every six months or so these days. The other organizations may find that the lifespan of its product are longer than that but Apple needs to be aware of the customers’ need and market trends for which it has to involve in continuous research and development. The research also helps in understanding what the needs are and what are the requirements of the end users and how the organization can meet them. The research and development helps the organization in many ways and it can be helpful for future use too.
Fig. 2. Overview of stages of new product development process along with representative consumer research methods and key references for reviews.
This strategy is often used by those organizations whose existing market is saturated and its profit is falling down, and there seems to be no chance of growth. Apple should involve in continuous research and development practice.
There are few basic approaches to the new product development:
i. The new product somehow is associated with the current product. Iphone’s having almost the same features and they may look alike to some extent.
ii. The new product must match with its customer’s purchasing power. The Apple should keep in mind the budget of its customers, how much they are willing to pay for its product.
iii. The new product reinvents the existing product.
4) Diversification Strategy:
A diversified strategy is used when there is a new product introduced in completely new market. In this strategy, the company has to be sure that the demand of new market will be different from that of existing market. It is essential for a company to have a clear idea of what it expects from the new market in terms of growth.
This strategy is considered to be at high risk but on the other hand many organizations want to practice this due to the high level of profit and growth attached with it. The Apple has already practiced this strategy and they have faced a huge success by first introducing Ipads and Ipods, and later entered market with their Iwatches which are completely new product apart from the phones.
This strategy also has some approaches as:
a. Full diversification: this approach is most risky as it is offering new product to a new market.
b. Backward diversification: this approach relates to preceding stage of the current existing product.
c. Forward diversification: this approach deals with diversification of a product that relates to the later stage that follows companies’ current offerings.
Which Strategy to select?
While selecting the right strategy, the organizations need to consider the following things before making any decision:
Sales expansion potentials
As per (Roberts, 2000) to successfully exploit new markets, the firms must understand the rules of that market and obtain the knowledge to convert it into more profitable, customer focused actions. Apple must be able to understand its market value and should work towards maintain or achieving high levels with the help of the knowledge and research available.
Conclusion and Future Research:
Today’s organizations have more options as to which market they want to or willing to enter and what innovative and effective products they will use in that market. The various approaches to target different segements through product innovation highlight the importance of implementing different products which will be more suitable to different market segment. Future research could help in providing guidelines for each of the matrix approaches to product innovation. Aple Inc should look and decide for a strategy which best suits them and through which they could achieve more in terms of the sales and market share. For this purpose it is very important that the company should always be busy in doing research so that they could easy make decisions when ever needed.