Presentation Marketing
Presentation Marketing
MARKETING
IMK 351
Team Members
Muhammad Usman
Abdul Mateen
Muhammad Umair
Muhammad Faizyab
Ali Ahmad
Product/Market Expansion Grid
Explanation:
The Ansoff Matrix, also called the Product/Market Expansion Grid, is a tool used
by firms to analyze and plan their strategies for growth. The matrix shows four
strategies that can be used to help a firm grow .
The matrix was developed by applied mathematician and business manager,
H. Igor Ansoff, and was published in the Harvard Business Review in 1957.
Product/Market Expansion Grid
Product/Market Expansion Grid
The four strategies of the Ansoff Matrix are:
Market Penetration: This focuses on increasing sales of existing products to
an existing market.
Product Development: Focuses on introducing new products to an existing
market.
Market Development: This strategy focuses on entering a new market using
existing products.
Diversification: Focuses on entering a new market with the introduction of
new products.
Product/Market Expansion Grid
Market Penetration:
In a market penetration strategy, the firm uses its products in the existing
market. In other words, a firm is aiming to increase its market share with a
market penetration strategy.
The market penetration strategy can be executed in a number of ways:
Decreasing prices to attract new customers
Increasing promotion and distribution efforts
Acquiring a competitor in the same marketplace
For example, telecommunication companies all cater to the same market and
employ a market penetration strategy by offering introductory prices and
increasing their promotion and distribution efforts.
Product/Market Expansion Grid
Product Development:
In a product development strategy, the firm develops a new product to cater to the
existing market. The move typically involves extensive research and development and
expansion of the company’s product range.
This strategy, too, may be implemented in a number of ways:
Investing in R&D to develop new products to cater to the existing market
Acquiring a competitor’s product and merging resources to create a new product that
better meets the need of the existing market
Forming strategic partnerships with other firms to gain access to each partner’s
distribution channels or brand.
For example, automotive companies are creating electric cars to meet the changing
needs of their existing market. Current market consumers in the automobile market are
becoming more environmentally conscious.
Product/Market Expansion Grid
Market Development:
In a market development strategy, the firm enters a new market with its existing
product(s). In this context, expanding into new markets may mean expanding into
new geographic regions, customer segments, etc.
The market development strategy may involve one of the following approaches:
Catering to a different customer segment
Entering into a new domestic market (expanding regionally)
Entering into a foreign market (expanding internationally)
For example, sporting goods companies such as Nike and Adidas recently entered
the Chinese market for expansion. The two firms are offering roughly the same
products to a new demographic.
Product/Market Expansion Grid
Diversification:
In a diversification strategy, the firm enters a new market
with a new product.
There are two types of diversification a firm can employ:
1. Related diversification
2. Unrelated diversification
Product/Market Expansion Grid
Related diversification:
There are potential synergies to be realized between the existing business and
the new product/market.
For example, a leather shoe producer that starts a line of leather wallets or
accessories is pursuing a related diversification strategy.
Unrelated diversification:
There are no potential synergies to be realized between the existing business and
the new product/market.
For example, a leather shoe producer that starts manufacturing phones is
pursuing an unrelated diversification strategy.