Ansoff Matrix Maxwell Marchand

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

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

Marketing Penetration 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.

Product Development Product Development is achieved by: Aim Risks Moderate Profits ●Bringing existing products to new markets 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 ● 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

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

Market Development Market Development is achieved by: Aim Risks Moderate>Lack of familiarity with customers Profits Medium range of profitability ●Same product to different people ●Entering existing markets with Includes Entering existing markets Problems ● Moderate Risk 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.

Advantages & Disadvantages 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. Disadvantages of the Ansoff Matrix: -is highly simplistic and does not factor in the external environment,