The 7 Key Steps to Creating A Market Development Strategy
If you’re developing the marketing plan for a new, innovative product, consider using market development strategies to prime the market for growth. Creating a market development strategy is essential for products where the innovation makes it possible to do something new, but external market conditions favor existing (older) solutions.
Conceptualize a market as an ecosystem governed by a complex interplay of regulations, standards and practices, stakeholder interests and behaviors. Market development strategies help change the existing “rules” of a market ecosystem to make the environment favorable for new entrants. (See our piece defining market development and why it is critical to launching new products.)
How to create a successful market development strategy
Creating an effective market development strategy is an important step in setting up your product for a successful launch. Included below are the 7 steps to creating an effective market development strategy.
1. Convene a cross-functional team
Market development is a team sport that involves understanding stakeholders and their interests and needs. Any organization that seeks to impact the market itself should start by convening internal leaders from multiple functions to get a broad, integrated perspective on the market and what actions should shape the organization’s market development efforts.
This market development team should include functions with responsibility for external stakeholder engagement. For example, for a pharmaceutical company, this would include public affairs, public policy, communications, marketing, advocacy, medical affairs, clinical development, regulatory and others. They should bring their qualitative and quantitative assessments of their stakeholders’ beliefs, attitudes and behaviors into the market development strategy discussions. A thorough understanding of your stakeholders, and the relationships between and among varied stakeholder groups, will be the foundation of your strategy.
The cross-functional team’s charter should be to look into the future and see what’s needed to help an innovation succeed, always offering their perspective on the stakeholders they know best.
2. Create a market landscape
This cross-functional group should be empowered to explore the current environment and identify areas where there are barriers or opportunities that, if addressed, can improve the customer experience.
The market landscape typically consists of three key parameters:
- The stakeholders who are active on the issues: Who are the major players in the market and what are they trying to achieve?
- The issues that are driving the market: What are stakeholders most concerned about? What changes are they trying to create on what issues?
- Case studies that illustrate relevant pathways for change: How has change happened in this market or in similar markets, and how could that serve as a model – or a cautionary tale – for the changes this team will pursue?
This landscape can synthesize existing research, particularly customer insights, but may also include new research specifically aimed at characterizing the market from a broad perspective, with case studies that explore specific issues and changes. Policy landscapes, or landscape analyses that focus on what industry or advocacy groups are doing, for example, often yield important insights relevant to market development opportunities.
The cross-functional team should clearly understand how each stakeholder group contributes to the current landscape and what related barriers and opportunities exist that support future innovation.
3. Envision an idealized future state
What does good look like in the future? Try to create a vision for the future, imagining the positive impact an innovation can have on a market. This should be a robust, mutually beneficial vision, one that stakeholders outside of your organization can embrace.
4. Create a market development narrative
Given the complexity of this exercise, we recommend clients develop a market development narrative that describes the problem an innovation is addressing, the future state “vision” of the full adoption of the solution, and the steps – with specific calls to action by stakeholders – required to bring that vision into reality.
Much like a brand narrative, a market development narrative is an internal document that can guide the execution of multiple communications materials that can be part of the market development process. Think of it as a source code for marketing campaigns, stakeholder engagement efforts, investor presentations, executive thought leadership and other communications efforts. In the case of new and innovative pharmaceutical treatments, a market development narrative should describe the current treatment journey and outcomes experienced by people living with a condition; the idealized treatment journey and changes in the healthcare system that support that future state; stakeholder-specific calls to action that will move us closer to that future; and a sense of shared purpose in supporting these changes that articulate the potential for better outcomes.
The question of lexicon will often come up in the discussion of new markets and innovations. Innovators often like to coin a new term to describe the category their innovation creates. There is no particular rule to govern whether or not a naming strategy will benefit the ultimate adoption of an innovation. As a general practice, where a name adds clarity to the market, it is worth exploring. Branding a category may ultimately make it simpler to articulate the change that needs to happen. Where that is true, it can be a powerful tactic.
This underscores an important point of effective market development strategies: at their most effective, they are mutually beneficial. While a commercial organization may seek changes that tie directly back singularly to their solution, market development is best done as an unbranded activity that may positively impact other solutions. For example, a truly novel therapy may need to invest significantly in market development strategies because it must create some catalyst for demand. Although the efforts may benefit other products in the future, as first entrants, they will have the opportunity to gain the greatest benefits.
5. Test the market development narrative
Use the narrative process as an exercise in design thinking. Present it to people who are well-informed on the space and get their feedback. Conduct qualitative and quantitative research once the narrative has been refined, to understand its effectiveness at driving changes in behavior. There are a number of tools and approaches with which to do this, but testing the narrative ultimately pressure tests the market development strategy itself and provides valuable feedback on how external stakeholders feel about the vision and the calls to action the organization is putting forward.
6. Conduct experiments
In the planning stage, cross-functional integration and input is key. In the implementation stage, it’s vital to empower teams to act. They must be clear on the goals and have the freedom to pursue different strategies.
Early stage activity may often take the form of pilots: Is there a way to partner on a real-world pilot that would demonstrate the value of changing the clinical workflow? Is there model legislation in a particular state that could reframe a given payment model in a way that would be favorable for future therapies?
While individual functions (public affairs, communications, marketing, etc.) are implementing their elements of the market development strategy, either in collaboration or independently, there needs to be a supportive governance structure. Role clarity is an important element of a market development effort, because there are often many interdependencies between various functions that need to be clarified and managed.
A strong project management infrastructure, with an emphasis on knowledge management, is needed to maintain momentum. Case studies and the materials and plans used to implement them should be widely available to support other teams across the enterprise who want to learn from and/or duplicate market development efforts.
7. Learn and evolve
When creating a market development strategy, there must be a focus not just on the results, but on gathering real-time feedback. The complexity of these interdependent strategies, along with the varied nature of market ecosystems, means that each pilot is an experiment that can hold key data relevant to another market or customer.
Feedback matters too. The team should engage in cross-functional learning forums, looking for patterns of what works and what does not. When a team implements a strategy, real-time feedback should be a part of the plan and the learnings from implementation should be shared widely as a case study.
Having a variety of market development tactics can yield powerful learnings about what kinds of change efforts can be effective, which stakeholders are willing to support them, and why. Such review sessions should regularly ask, “are we getting closer to our goals? If yes, why? If no, why not?”
While the granular details of such efforts can seem unique to a given market, elements can often be applied elsewhere.