When an organization struggles to improve its competitive position with the current products then different types of intensive strategies should be considered. Intensive efforts are needed to employ when intensive strategies are exercised by the organization. Intensive strategies include the following strategies.
Types of Intensive Strategies
- Market Penetration
- Market Development
- Product Development
Each one is discussed below in detail
- Market Penetration:
In this strategy the organization tries to enhance its market share through greater marketing efforts for its present products or services. This means that the organization does not launch new products or does not modified its existing products. Rather it increases the sales volume of its existing products by focusing more on the marketing efforts in the existing markets. Market Penetration Strategies are used both solely & together with other strategies. Marketing penetration includes the effective marketing efforts which are as follow.
- Enhancing the number of salespersons
- The advertising expenditure is enhanced
- Sales promotion items are extensively offered
- The publicity efforts are enhanced
Guidelines for Market Penetration:
There are certain conditions that are more suitable to the market penetration strategy. In order to make market penetration strategy effective, certain guidelines should be followed by the organization in this regard.
- When the current markets are not much saturated
- The present customers are positively forced to increase the usage rate of the products of the market
- The condition in which the market share of the competitors fall while there is sales growth in the overall industry
- Major competitive advantages are availed by the greater economies of scale
Aspects of Market Penetration:
Market penetration has two aspects which are as follow
- Rapid Market Penetration: Following two assumptions are based on it.
- To decrease the price
- To increase the promotional activities
- Slow Market Penetration: Two assumptions are based on it, which are as follow
- To decrease the price
- Promotional activities remain the same
- Market Development:
Market development strategy is the kind of intensive strategies in which the Business Organization launches its existing products in the new markets or geographical areas. This means that the organization does not introduce new or modified products rather the products remain the same but the new markets are added by entering into new geographical areas. In recent years market development is rapidly employed on international basis where multinational companies increase the market share by entering new regions & countries of the world through their existing products. Further more airline industry must also consider proper market development in the international market for its survival.
Guidelines for Market Development:
There are certain conditions where the market development strategy can be more effective. For this purpose following are some important guidelines that need to be considered while pursuing this strategy.
- New distribution channels should be approached that are inexpensive, reliable & have good quality
- The organization become successful in its current operations
- When there are unsaturated or untapped markets available
- Human & capital resources are essential factors for managing the expanding operations of the organization
- The condition when the production capacity is excessive enough
- The basic industry is quickly converted into global one
- Product Development
In this strategy, the organization tries to improve its competitive position & sales through improvement & modification in its existing products. Usually there are large portion of expenditures that are associated with the New Product Development Strategy as it requires detailed research & development activities to modify or improve the products. There is better example of product development strategy which is employed by US postal service that offers postage & stamps through Internet. The stamps are acquired from a number of online websites like stamps.com etc, which are printed through inkjet printer or ordinary laser. Furthermore there are certain other organizations that are also introducing their own digital stamps by employing product development strategy like Neopost, Pitney Bowes & E-stamp Corporation etc.
Guidelines for Product Development:
There are certain conditions that make the product development strategy much more effective. Following are some of guidelines in this regard.
- When the product is passing through the maturity stage of its life cycle
- The industry where there are much more technological advancements occurring is effective for employment of new product development strategy by the relating organizations
- Most of the competitors offer high quality products at reasonable rates
- The industry that shows high growth is favorable for the product development strategy
- The organization with potential research & development capabilities is more suitable for this strategy.