Ansoffs Matrix Notes

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Ansoff's Matrix

Igor Ansoff in 1957 created the Matrix. It is a marketing planning tool, used for identifying and categorising growth opportunities. The matrix considers on two dimensions: markets and products.

|Existing Products|New Products|Risk|
Existing Markets||||
New Markets||||
Risk||

Market Penetration|
Involves:|Methods:|Use when:|
Increasing market share in current markets with current products.•Securing dominace in growth markets, but saturated markets are hard to penetrate. •Low risk. |•Restructure a mature market by driving out competitors; this would require a much more aggressive promotional campaign, supported by a pricing strategy designed to make the market unattractive for competitors•Increase usage by existing customers – for example by introducing loyalty schemes. |•Market is not saturated.•Market is growing.•Competitors' share of the market is falling.•There is scope for selling more to existing customers. |

Market Development|
Involves:|Methods:|Use when:|
Selling the same product to different people. •Entering new markets with existing products. •Gaining new customers, new markets, new segments.•Entering overseas markets. •Moderate risk. |•New geographical markets; for example exporting the product to a new country•New product dimensions or packaging: for example•New distribution channels• D ifferent pricing policies to attract different customers or create new market segments|•There are gaps in the market.•The firm has excess capacity.|

Product Development|
Involves:|Methods:|Use when:|
New products to existing markets. •Moderate risk.|•New products to replace current products.•New innovative products.•Product improvements.•New products to compliment products. •Products of a higher quality to current. |•The firm has strong R&D capabilities. •The market is growing. •There is rapid change. •The firm can build on existing brands. •The firm's competitors have better...
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