business unit 3.8
choosing which market to compete in and what products to offer
ansoff's matrix
choosing how to compete
bowmans strategic clock
porters generic strageties
market penetration: selling an existing product in its current market but with a small change to product or another part of the marketing mix
market development: introducing existing products into new markets
new product development: introducing a new product into an existing market
diversification: selling a new product in a new market
evaluation
key points
key points
key points
key points
evaluation
evaluation
evaluation
aims to increase market share
widens the rage of existing products
unlikely to require significant market research
provides less growth making it potentially less likely a business will meet growth objectives
brand expansion is also an example of product development
technological innovation provides significant opportunities for product development
strong emphasis into market research of consumer needs
a good way of exploiting existing customers
typically new geographical markets or new distribution channels
could also be using different pricing mechanisms to attract new segments of a market
logical to use when existing market is saturated or indecline
existed products may not be suited to new markets meaning market research will be required
can also be acquiring an existing business that sells a new products in a new markets
extends an existing brand into a new markets
most risky stragety due to no experience with market or product
business will have few economies of scale
cost focus
differentiation
differentiation focus
ansoff's matrix
cost leadership
focused differentiation
differntiation
rish high margins
hybrid
monopoly pricing
low price
loss of market sharing
low price and low added value
not a very competitive stragety as the customer pervies very little value, and won't buy the product if another has a lower price
a stragety that uses cost minimisation and often economies of scale to allow for low prices, products have low profit margins and competition between low cost business is often high.
when a business aims to have relatively low prices when compared to competitors and still provide some differntiation, tends to have the aim that despite a slightly higher price the added bonus from the differntiation is worth it
a stragety of attempting to offer the higher level of perceived added value, branding plays a key role with product quality. a high quality product with a strong brand with brand loyalt is best suited to this stragety
suituationing a product at the higher price levels whilst attempting to achieve high perceived added value, a stragety adopted by luxury brands. when successful this stragety has very high profits margins
offering a high price with little or no added value. when it works there are high profit margins with little added cost to low price strageties. however it is likely to fail eventually as customers being to find lower price options with the same perceived added value.
when there is a monopoly in the market so the business can set the price they want within reason as customers with have to buy from the business or not get the product.
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