There are 4 types of markets:
- existing market - here, the users, the market and the competitors are known. One should compete here on product features and performance.
- new market - a new market is created if the product enables the customers to do something that they were unable to do until you came along. Customers are unknown and the direct competitors do not exist. If there is no competition, product features are less important. The most important thing is to identify customers and sell your vision.
- resegmentation of an existing market as a low-cost player - this assumes that a large market segment will start using a product that is inferior in terms of features, good enough to solve the actual problem as long as the price is lower. If these conditions exist and your product can be profitable, the strategy is viable(low-cost airlines).
- resegmentation of an existing market by employing a new strategy - this is a viable solution if you can identify a part of the market that will be satisfied by a more focused solution. You need to prove that a more focused solution will provide a higher value to existing customers and the challenge is the demonstration of the said value that motivates enough customers to switch to your solution.
While the first two are mutually exclusive, the last two are specific sub-categories of the existing market.
No matter what market you are entering, you need to determine your strategic focus and positioning.