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Real-world example of market penetration, market development, and product development

The 3 concentration strategies we will consider are as following –

Market Penetration

Market Development

Product Development

 

Market Penetration – when firms try to grab a bigger market share with existing product or service, that concentration strategy is known as market penetration.

McDonalds introduced dollar menu, and when customers order dollar menu items they tend to order more. In 2018, McDonalds witnessed great growth in sales with their $4 menu items and other low-cost offering (Duggan,2018).  With introduction of these menu items McDonalds gained market share, so this was a great market penetration strategy.

Microsoft offers office suite, which is great for all enterprise usage, this is a good market penetration strategy. Because these products are great for all types of users.

Market Development – when a firm takes the existing product or service and takes it to a new market, where they were not present before, that is called market development.

When McDonalds took their menu, and expanded in India and China, it was a Market development move. 50% Indian follow strict vegetarian diet. And beef or pork is not popular in India. So, McDonalds had to localise their menu. Their menu in India focused on vegetarian burgers and they did not have any pork or beef items (Kannan, 2014). While expanding their business in India is a good example of market development. India has a growing middleclass who are eating out more and more.

But I think localising their menu for vegetarian majority population is an example of market penetration.

 When Facebook or Google went international, they did not have to change much, as anyone could access the sites over internet. They took their service and made those available in different geographies. This is a good example of market development.

Product Development – When a firm develops a new product to introduce to existing market, that is called product development.

In India to serve the vegetarian population McDonalds introduced Aloo Tikki burger. The Aloo Tikki burger costs 20INR. Which was a good competition to other food choices available in India. Moreover, McDonalds had to remove pork and beef items from menu (Kannan, 2014). This is a good example of product development, since while entering a new market they developed a new product, it was a product development.

Microsoft often localises their windows and office suites in local languages. This could be example of product development.

 

References –

Kannan, S. ( November, 2014). Hod McDonald’s conquered India. Retrieved from https://www.bbc.com/news/business-30115555

Duggan, W. ( May,2018). McDonald's Is Gobbling Up Market Share. Retrieved from https://money.usnews.com/investing/stock-market-news/articles/2018-05-02/mcdonalds-corporation-mcd-stock


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