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Maxwell Marchand. Ansoff Matrix developed by Igor Ansoff, a Russian American mathematician and business manager Made as a framework for identifying corporate.

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Presentation on theme: "Maxwell Marchand. Ansoff Matrix developed by Igor Ansoff, a Russian American mathematician and business manager Made as a framework for identifying corporate."— Presentation transcript:

1 Maxwell Marchand

2 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

3 Increase sales to the existing market Penetrate more deeply into existing market New Products developed for existing market Existing products sold to new markets New products sold in different markets

4 Aim To maintain or increase share of the current market with current products To secure dominance of a growth market or restructure a mature market by driving out competition Risks Low risk Profits Low rewards Includes Involves an increase in sales of existing products to existing markets Selling more of the same thing to the same people Problems Difficult 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- Hence competition will be intense Marketing Penetration is achieved by: -Increased usage by existing customers -Attracting customers away from rivals -Gain Marketing share at expense of rivals -Encourage increase of frequency of use -Devise and encourage new applications -Encourage non buyers to buy Examples of Market Penetration: Starbucks coffee starting out was small, marking to people who wanted coffee in a local area.

5 Aim Risks Moderate Profits Moderate Includes Selling the same product to different people, entering new markets or segments with existing products, Gaining new products, new segments, new markets, and entering overseas markets Problems Bringing existing products to new markets Moderate risk, Costly Product Development is achieved by: -New products to replace current products -New innovative products -Product improvements -Product line improvements -Product line extensions -Products at different quality level to existing products Examples of Product Development: A company extending their branding to another product. Example: Arm & Hammer extending to include sale of toothpaste

6 Aim Risks High> because of dealing with two unknowns Profits High range of profitability Includes Selling new products to new markets Problems New products sold to new markets New products for new consumers Very Risky Marketing Development is achieved by: -New products to new markets. -New products for new customers Examples of Market Development: McDonalds starting McCafe.

7 Market Development is achieved by: -Same product to different people -Entering new markets or segments with existing products -Gaining new customers, new segments, new markets -Entering oversea markets Examples of Market Development: Expanding their market to undeveloped (in terms of the business and marketing) areas and parts of the world- example: Coca Cola expanding their reach to Russia. Aim Risks Moderate>Lack of familiarity with customers Profits Medium range of profitability Includes Entering existing markets Problems Same product to different people Entering existing markets with Moderate Risk

8 Disadvantages of the Ansoff Matrix: -is highly simplistic and does not factor in the external environment, Advantages of the Ansoff Matrix: - Increasing the brand loyalty, this will encourage customers to buy their brand instead of some other. Well known brands use this strategy, such as; Kellogg's corn flakes. - Encourages customers to buy the product more regularly. - The brand may bring out different size quantities of the product, which will encourage customers to buy more of the product.


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