Business Growth and Marketing - Explained
Marketing - Why is Growth Important?
Written by J. Mance Gordon
Updated at April 17th, 2024
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Why is Growth Important for a Business?
There is an old saying in business, "If you're not growing, you're dying." The reason for this saying is tied to the competitive aspects of business in a capitalist market.
Economics tells us, if there is value to be grabbed by carrying on a commercial activity, then new businesses will enter the market to grab that value. As the market becomes oversaturated and prices for goods drop below profitability, then businesses will die out, competition will lessen, prices will rise, and profitability will be restored. There will be a constant fluctuation of businesses in the market below and above the point of equilibrium (where cost equal price). As such, businesses are always seeking to increase their sales, revenue, and market share.
How is Business Growth Related to Marketing?
Marketers are in the business of driving additional customers (and hopefully revenue) for a business. Thus, marketers are the drivers of business growth.
To do so, marketers must be able to meet demand. Demand is generally growing, as the population of the world is growing.
Lastly, new technologies and innovations are bringing and ever-increasing number of products into the market. Marketers are charged with making potential customers aware of these products.
How do Marketers Create Growth?
Marketers generally create growth in the following ways:
- Market Penetration - Market penetration means we're going to sell more product in our existing market.
- Market Development - Market development means creating demand for existing products in a new market.
- Product Development - Product development means selling new products in an existing market.
- Diversification - Diversification refers to creating new products to sell in new or different markets.
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