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Ansoff

Ansoff Matrix

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4 views3 pages

Ansoff

Ansoff Matrix

Uploaded by

Sam Catlin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Ansoff Matrix

Ansoff's Matrix is a marketing planning model that helps a business


determine its product and market growth strategy.

Business Strategy: Explaining the Ansoff Matrix

Ansoff Matrix

Ansoff’s product/market growth matrix suggests that a business’ attempts


to grow depend on whether it markets new or existing products in new or
existing markets. The output from the Ansoff product/market matrix is a
series of suggested growth strategies which set the direction for the
business strategy. These are described below:

Market penetration

Market penetration is the name given to a growth strategy where the


business focuses on selling existing products into existing markets.

Market penetration seeks to achieve four main objectives:

 Maintain or increase the market share of current products – this can


be achieved by a combination of competitive pricing strategies,
advertising, sales promotion and perhaps more resources
dedicated to personal selling

 Secure dominance of growth markets

 Restructure a mature market by driving out competitors; this would


require a much more aggressive promotional campaign, supported
by a pricing strategy designed to make the market unattractive for
competitors

 Increase usage by existing customers – for example by introducing


loyalty schemes

A market penetration marketing strategy is very much about “business as


usual”. The business is focusing on markets and products it knows well. It
is likely to have good information on competitors and on customer needs.
It is unlikely, therefore, that this strategy will require much investment in
new market research.

Market development

Market development is the name given to a growth strategy where the


business seeks to sell its existing products into new markets.

There are many possible ways of approaching this strategy, including:

 New geographical markets; for example exporting the product to a


new country

 New product dimensions or packaging: for example

 New distribution channels (e.g. moving from selling via retail to


selling using e-commerce and mail order)

 Different pricing policies to attract different customers or create new


market segments

Market development is a more risky strategy than market penetration


because of the targeting of new markets.

Product development

Product development is the name given to a growth strategy where a


business aims to introduce new products into existing markets. This
strategy may require the development of new competencies and requires
the business to develop modified products which can appeal to existing
markets.

A strategy of product development is particularly suitable for a business


where the product needs to be differentiated in order to remain
competitive. A successful product development strategy places the
marketing emphasis on:

 Research & development and innovation

 Detailed insights into customer needs (and how they change)

 Being first to market


Diversification

Diversification is the name given to the growth strategy where a business


markets new products in new markets.

This is an inherently more risk strategy because the business is moving


into markets in which it has little or no experience.

For a business to adopt a diversification strategy, therefore, it must have a


clear idea about what it expects to gain from the strategy and an honest
assessment of the risks. However, for the right balance between risk and
reward, a marketing strategy of diversification can be highly rewarding.

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