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Maxwell Marchand
Ansoff Matri
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Function
Ansoff Matrix developed by Igor Ansoff, a Russian
American mathematician and business manager
Made as a framework for identifying corporate
growth opportunities
Four generic growth strategies:
-Market Penetration-Market Development
-Product Development
-Diversification
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Growth Strategies
Increase sales to the existing
market
enetrate more deeply intoexisting market
!ew roducts
developed forexisting market
"xisting products
sold to new markets!ew products sold
in different markets
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Marketing Penetration
Aim
#o maintain or increase share of the current market with current products #o secure dominance of a growth market or restructure a mature market by driving out competition
Risks
$ow risk
rofits
$ow rewards
Includes
Involves an increase in sales of existing products to existing markets %elling more of the same thing to the same people
roblems
&ifficult to achieve growth through market penetration if market is saturated' In a stagnant market, increase in sales is only possible by grabbing market share from rivals( )ence competition will be intense
Marketing Penetration is achieved by:
(Increased usage by existing customers
(Attracting customers away from rivals
(*ain Marketing share at expense of rivals
("ncourage increase of fre+uency of use
(&evise and encourage new applications
("ncourage non buyers to buy
Examples of Market Penetration:
%tarbucks coffee starting out was small, marking
to people who wanted coffee in a local area'
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Product Development
Aim
Risks Moderate
rofits
Moderate
Includes
%elling the same product to different people, entering new markets or segments with existing products,*aining new products, new segments, new markets, and entering overseas markets
roblems
-ringing existing products to new markets
Moderate risk, .ostly
Product Development is achieved by:
(!ew products to replace current products
(!ew innovative products
(roduct improvements
(roduct line improvements
(roduct line extensions
(roducts at different +uality level to existing products
Examples of Product Development:
A company extending their branding to another
product' "xample: Arm / )ammer extending to
include sale of toothpaste
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Marketing DiversificationAim
Risks )igh0 because of dealing with two unknowns
rofits )igh range of profitability
Includes %elling new products to new markets
roblems
!ew products sold to new markets!ew products for new consumers
1ery Risky
Marketing Development is achieved by:
(!ew products to new markets'
(!ew products for new customers
Examples of Market Development:
Mc&onalds starting Mc.afe'
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Market Development
Market Development is achieved by:
(%ame product to different people
("ntering new markets or segments with
existing products
(*aining new customers, new segments, new markets
("ntering oversea markets
Examples of Market Development:
"xpanding their market to undeveloped 2in
terms of the business and marketing3 areas and
parts of the world( example: .oca .ola
expanding their reach to Russia'
Aim
Risks Moderate0$ack of familiarity with customers
rofits
Medium range of profitability
Includes "ntering existing markets
roblems
%ame product to different people
"ntering existing markets with
Moderate Risk
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Advantages & Disadvantages
Disadvantages of the Ansoff Matrix:
(is highly simplistic and does not factor in the externalenvironment,
Advantages of the Ansoff Matrix:
( Increasing the brand loyalty, this will encourage customersto buy their brand instead of some other' 4ell known brands
use this strategy, such as5 6ellogg7s corn flakes'
( "ncourages customers to buy the product more regularly'( #he brand may bring out different si8e +uantities of theproduct, which will encourage customers to buy more of the
product'