When a company decides to expand its operations and sales there are a number of decisions that it has to make. Failure to do this results in loss of the existing market share. The main dilemma regards how to bring in more customers to buy the product without offending loyal customers who have been using the product (Markowitz & Fressart, 2009). To begin with, the company has to decide on what aspects of their products to focus their efforts on in a bid to increase the market share. For instance in the case of Subaru, the automobile company decided to focus on those aspectsa of their products that endear the brand to the customers (Solomon et al. 2012).

In the case of Subaru, the company was facing the problem of not only maintaining its continued growth in market share but also bringing in customers other than its traditional customers. Even though it was the fastest growing automaker in the market, the brand known for producing all wheel terrain cars was finding it difficult to penetrate the smooth terrain market without offending the original market segment (Solomon et al. 2012). Appealing to such drivers called for a lot of effort on both marketing and the design arm of Subaru.  To achieve this, the company had to find an emotional connection between itself and the customers.

When expanding the market segment, the company is also faced with the problem of deciding what approach it will take (Markowitz & Fressart, 2009). A company may decide to take a holistic approach that involves making known to potential customers what the strong points of the product it is promoting are. This calls for the company to conduct a thorough research on its target market to determine what its needs are and how best to satisfy them. One has to identify the various issues surrounding bringing of a new product to the market and how best to solve them.

Question 2

There are various factors one should consider if he decides to widen his target market. To begin with, one has to answer the question of who other than the existing customers needs the product (Belu, 2008). A business that intends to increase its market segment must have the belief that there other people out there who need the services it is offering. One has to ensure that there are enough people who need his product. Having too few people who need the product will cause it to fail. Hence it is important that even as one tries to find new market for the product, he should maintain the existing one. Launching a product into a new market takes times and resources hence it should be worth the effort. Depending on budget constraints one can create a need for the product in the market segment he targets.

In deciding to expand target market segment one has to consider competition. It is likely that there will be competition for whichever market segment one chooses to expand into. Competition if not well taken care of can greatly spoil ones chances of being successful once introduced in the new market. one not only needs to know who the competition is, but also  needs to know the approximate time it might require competition to produce  a similar product with a similar appeal to the customers.

Customers in the new market segment that one is expanding into can accept or reject the product depending on several factors. These include their perception of the product one is introducing in terms of prestige and its ability to fulfill their needs (Belu, 2008). If one had a nasty experience with a similar product before, it is likely that they will resist the product once it’s reintroduced to them.  Newly introduced products also face rejection in the market if they are of inferior quality compared to the existing ones or have visible defects. In products like cars, design and the aesthetic value of the product is very important and plays a big role in determining whether it will receive good reception in the market or it will face rejection.

Another important factor one ought to consider when introducing a product in a new market segment is the pricing strategy to be employed (Markowitz & Fressart, 2009). Depending on the product one can decide to price the product in a way to attract the mass market or price it in a way that it will attract prestigious buying. There are even those who price their products below the cost price. This is especially common in situations where one product is meant to promote another in the market. Where the product is strong on other qualities, one can decide to price it on about the same price as the competition. Pricing strategy will depend on the bigger company growth strategy, the product itself as well as the prevailing market conditions.

Question 3

There are very few alternatives to going out expanding into a new market segment. One of these alternatives is encouraging the existing market segment to buy more products. This is mostly applicable where the existing market segment is vast and has not been exploited fully. It is also widely employed in cases where a business has a good grip of a market segment and is in no immediate danger of losing to competition.

Getting an existing market segment to consume more of a product as opposed to introducing the product to new potential customers, calls for innovation. One must keep adding to the product features that add utility to the product. One has to find ways to prolong the product life cycle. This includes activities like re-launch and rebranding (Belu, 2008). The product must have timely response to the changing needs of the customers. This way the customers will not see any need to try other products. It also requires marketing efforts to sensitize the customers on their need to consume more of the products.

Question 4

It is recommended that any business wishing to expand to new markets must first understand the new market as well as understand its own capabilities. Hence the business must carry out a study to find out how well the existing factors support the reception of the product into the market (Markowitz & Fressart, 2009) . In the study the company must find out whether the products they are offering to the market covers well the existing need gaps. The product must offer better value compared to existing alternatives. To increase the chances of products having a good reception in the market, one should come up with a promotion campaign aimed at the target market segment and one that informs them of the benefits of buying into the new product.