DECA Retail Merchandising Practice Exam

What does market expansion involve?

1. Opening more stores in the same market

2. Introducing a new format for the same target

3. Opening stores in new areas

4. Developing more online sales

The correct answer is: Opening stores in new areas

Market expansion involves the process of a business extending its operations into new geographical areas or markets. This can include establishing new retail locations in different cities or regions where the company previously had no presence. By opening stores in new areas, a retailer aims to reach new customers, increase brand awareness, and ultimately grow sales and market share. This approach helps a business diversify its risk and take advantage of untapped markets, which can be critical for long-term success. Expanding to new geographical areas can also allow a retailer to leverage its existing products or services in environments where there's potential demand. Meanwhile, the other options represent different strategies that, while important for overall business development, do not specifically define market expansion. Opening more stores in the same market focuses on saturation of an existing area. Introducing a new format targets the same demographic but does not necessarily involve reaching a new market. Developing more online sales enhances the sales channel but doesn't involve geographical expansion.