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Ansoff Product-Market Growth Matrix: Market Penetration (Existing Markets, Existing Products)

The document describes Ansoff's Product-Market Growth Matrix, which outlines four main growth strategies: market penetration, market development, product development, and diversification. Market penetration involves increasing market share of existing products in current markets. Market development involves entering new markets with existing products. Product development grows the business by developing new products for existing markets. Diversification, the riskiest strategy, involves entering new markets with new products.

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Sohini Sinha
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64 views6 pages

Ansoff Product-Market Growth Matrix: Market Penetration (Existing Markets, Existing Products)

The document describes Ansoff's Product-Market Growth Matrix, which outlines four main growth strategies: market penetration, market development, product development, and diversification. Market penetration involves increasing market share of existing products in current markets. Market development involves entering new markets with existing products. Product development grows the business by developing new products for existing markets. Diversification, the riskiest strategy, involves entering new markets with new products.

Uploaded by

Sohini Sinha
Copyright
© Attribution Non-Commercial (BY-NC)
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 Product-Market Growth Matrix

Market Penetration (existing markets, existing products):


 Company enters/penetrates a market to increase current market share with
current products. this can be achieved by a combination of competitive
pricing strategies, advertising, sales promotion and perhaps more resources
dedicated to personal selling

 Attract customers away from rivals-aggressive promotional campaign,


supported by a pricing strategy designed to make the market unattractive for
competitors

 Encourage non buyers to buy

 Convincing current clients to use more of your product/service-by


advertising, by introducing loyalty schemes

 Market penetration is the least risky way for a company to grow

 Market penetration require realignment of marketing mix

 Market penetration is used when:

 Market isn’t saturated and there’s growth in the market

 Competitor market share is falling

Market Development (new markets, existing products):


 Market development is the name given to a growth strategy where the
business seeks to sell its existing products into new markets
 Market development will require to change marketing strategy to attract
different type of customers or create new market segments

 New distribution channels

 Different pricing policy,

 New product dimensions or packaging,

 New promotional strategy

 Market development is used when

 Untapped market are beckoning(attractive)

 The firm had access capacity

 There are attractive channel to access new market

 It involves moderate risk-there is lack of familiarity with customers but at


least product is familiar

Product Development (existing markets, new products):


 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.
 Product development is used when:

 Firm has strong R&D Capabilities

 The market is growing

 The firm can built on existing brand

 Competitor have better product

 It is costly and moderate risk involve

Diversification (new markets, new products):


 Requires a company to acquire new skills, new techniques and new facilities

 The purpose of diversification is to allow the company to enter lines of


business that are different from current operations

 Diversification is a form of growth strategy. Growth strategies involve a


significant increase in performance objectives (usually sales or market share)
beyond past levels of performance

 This is an inherently more risk strategy because the business is moving into
markets in which it has little or no experience

 Example:

 Walt Disney moved from producing animated movies to theme parks and
vacation properties

 Canon diversified from a camera-making company into producing whole


new range of office equipment

 Virgin Media moved from music producing to travels and mobile phones

Concentric Diversification:
 When the new products are closely related to current products are introduced
in market

 Example:

 Addition of tomato ketchup and sauce to the existing "Maggi" brand


processed items of Food Specialties Ltd. is an example of technological-
related concentric diversification

Conglomerate diversification (or lateral diversification):

 The company markets new products or services that have no technological


or commercial synergies with current products, but which may appeal to
new groups of customers

 The conglomerate diversification has very little relationship with the firm's
current business

Horizontal Diversification:

 The company adds new products or services that are technologically or


commercially unrelated (but not always) to current products, but which may
appeal to current customers

 In a competitive environment, this form of diversification is desirable if the


present customers are loyal to the current products and if the new products
have a good quality and are well promoted and priced

 For example company was making note books earlier now they are also
entering into pen market through its new product

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