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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
Growth Strategies
Increase sales to the existing
market
Penetrate more deeply into
existing market
Existing products
sold to new markets
New Products
developed for
existing market
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
• Low risk
Risks
• Low rewards
Profits
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:
Examples of Market Penetration:
-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
Starbucks coffee starting out was small, marking
to people who wanted coffee in a local area.
Product Development
Aim
Risks
Profits
Includes
●Bringing
existing products to new markets
• Moderate
• Moderate
• 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
●
Moderate risk, Costly
Problems
Product Development is achieved by:
Examples of Product Development:
-New products to replace current products
A company extending their branding to another
-New innovative products
product. Example: Arm & Hammer extending to
-Product improvements
include sale of toothpaste
-Product line improvements
-Product line extensions
-Products at different quality level to existing products
Marketing Diversification
Aim
Risks
Profits
Includes
●New products sold to new markets
●New products for new consumers
• High> because of dealing with two unknowns
• High range of profitability
• Selling new products to new markets
●
Very Risky
Problems
Marketing Development is achieved by:
Examples of Market Development:
-New products to new markets.
-New products for new customers
McDonalds starting McCafe.
Market Development
Aim
Risks
Profits
Includes
●Same product to different people
●Entering existing markets with
• Moderate>Lack of familiarity with customers
• Medium range of profitability
• Entering existing markets
●
Moderate Risk
Problems
Market Development is achieved by:
Examples of Market Development:
-Same product to different people
-Entering new markets or segments with
existing products
-Gaining new customers, new segments, new markets
-Entering oversea markets
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:
Disadvantages 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.
-is highly simplistic and does not factor in the external
environment,