Market expansion strategy-perfomance relationship / created by Vasant V. Bang and Sharad L. Joshi

Asian countries like India and China represent large untapped markets for consumer products. Hence market expansion strategy is an important strategic option in these countries. But there are hardly any studies which examine links between market expansion strategy and performance in a developing country like India. In this exploratory study a multi-item scale has been developed to measure the extent to which a company practises market expansion strategy. Four components of market expansion strategy are identified as: improving consumption and purchasing ability; improving willingness to buy; creating affordability; and improving sustainability. Overall market expansion strategy score shows a positive correlation with sales revenue and profits in case of consumer durables. But in case of non-durables the correlation is observed only with sales growth rate. Correlation of individual components with performance indicators has also been studied.