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Ansoff Matrix. Maxwell Marchand. 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

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ansoff matrix

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

Function
growth strategies

New Products developed for existing market

Increase sales to the existing market

Penetrate more deeply into existing market

Growth Strategies

Existing products

sold to new markets

New products sold

in different markets

marketing penetration

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
  • Involves an increase in sales of existing products to existing markets
  • Selling more of the same thing to the same people
  • Aim
  • Includes
  • Risks
  • Problems
  • Low risk
  • 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
  • Profits
  • Low rewards
Marketing Penetration

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

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

●Bringing existing products to new markets

  • Aim
  • Includes
  • Risks
  • Problems
  • Moderate
  • Profits
  • Moderate

● Moderate risk, Costly

Product Development

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

Selling new products to new markets

  • Aim
  • Includes

●New products sold to new markets

●New products for new consumers

  • Risks
  • Problems
  • High> because of dealing with two unknowns
  • Profits
  • High range of profitability

● Very Risky

Marketing Diversification

Marketing Development is achieved by:

-New products to new markets.

-New products for new customers

Examples of Market Development:

McDonalds starting McCafe.

market development

Entering existing markets

●Same product to different people

●Entering existing markets with

  • Aim
  • Includes
  • Risks
  • Problems
  • Moderate>Lack of familiarity with customers
  • Profits
  • Medium range of profitability

● Moderate Risk

Market Development

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 & 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,