|
|
For Marketing Learners Globally
HOME | LESSONS | THEORY | BTEC | MOBILE | VIDEO CHANNEL | GLOSSARY | MARKETING QUIZZES | CONTACT | LINKS | RESOURCES FOR SALE | MARKETING POWERPOINTS
Ansoffs Matrix
A common tool used within marketing was developed by Igor Ansoff in 1957. He suggested that a business can grow in one of four ways, from the lowest risk to a high risk strategy for growth.
1. Market Penetration: This involves increasing sales of an existing product and penetrating the market further by either promoting the product heavily or reducing prices to increase sales. This is the lowest risk strategy and is often used by supermarkets or other large retail chains.
2. Product Development: The organisation develops new products to aim within their existing market, in the hope that they will gain more custom and market share. For Example Microsoft with their Xbox2 game console have introduced the Kinect, an add on that allows customers to play without the use of a controller, much like the Nintendo Wii. This is an example of a new product which simply needs to be added onto the existing model aimed at the existing market.
3. Market Development: The organisation here adopts a strategy of selling existing products to new markets. This could be simply a sandwich shop which does well in one area and expands and opens up in a different region. Eventually our sandwich shop may become a national chain.
4. Diversification: Moving away from what you are selling (your core activities) to providing something new eg Moving over from selling foods to selling cars. This is a high risk strategy but sometimes give you the highest rewards.Whilst Ansoffs strategy talks about growth, a firm may consider a strategy of consolidation. Where the organisation adopts a strategy of withdrawing from particular markets, scaling back on operations and concentrating on its existing products in existing markets. This may occur when a venture overseas may not be successful because the firm could not break into the foreign market.
Studying Management? Visit www.learnmanagement2.com
Further reading:
Case studies from www.thetimes100.co.uk
Principles of Marketing by Philip Kotler
Principles of Marketing by Frances Brassington
|