DECA Retail Merchandising Practice Exam

The growth strategy that involves entering a new market segment using the existing retail format is market expansion. This approach allows a retailer to leverage its current business model while reaching new customer demographics or geographic areas. By utilizing the existing retail format, the business can capitalize on its established operations, brand identity, and customer loyalty, making it easier to introduce its products or services to a broader audience without necessitating significant changes to its operational structure.

Market expansion focuses on increasing the market reach and sales of existing products by tapping into segments that the retailer hasn’t previously targeted. This strategy is beneficial in terms of resource efficiency and brand consistency, allowing for a smoother transition into new markets.

In contrast, other strategies like market penetration aim to increase sales within existing markets, while diversification involves entering completely new markets with new products, and retail format development generally refers to altering the retail format itself rather than expanding into new segments. Each of these strategies serves different purposes and involves varying levels of risk and resource allocation.