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Ansoff Matrix - A product and marketing stratergy - Coggle Diagram
Ansoff Matrix - A product and marketing stratergy
What is the Ansoff Matrix?
a marketing planning model that helps a business determine its product and market strategy
Measures risk : markets and products
Market penetration (lowest risk)
Aim is to increase market share
By selling more existing products to the same target customers
get existing customers to buy more
Widen the range of existing products
Market penetration seeks to achieve four main objectives -
1 - Maintain or increase the market share of current products, which can be achieved through a combination of competitive pricing stratergies, advertising, sales promotion and perhaps more resources dedicated to personal selling.
2- secure dominance over growing markets
3- restructure a market by driving out competitors; this would require a much more aggresive
4-
Product development (new product in an existing market) (middle risk)
Product development is the name given to a growth strategy where a business aims to introduce new products into existing markets
A stratergy 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 stratergy places the marketing emphasis on: Research and development on innovation, detailed insights into customers needs (and how they change), being first to the market
Market development (existing products in new markets) (middle risk)
There are many different ways of approaching this stratergy including:
New geographical markets; for example exoirtubg 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)
Diversification (new products in new markets) (highest risk)
It is very risky as it is moving into a market with little to no experience with a product in which it has little or no experience
Few economies of scale (initially)
If successful, the overall risk of the business is spread
Approaches to Diversification : spending a lot of money on innovation, acquire and existing business (takeover/aquisition), extend an existing brand into a new market
Uses of the ansoff matrix
A framework to explore directions for strategic growth
It is the most commonly used model for analysing the possible strategic direction that a business should take
It only identifies and analysis different growth opportunities it also encourages planners to consider both expected returns and risks