Ansoff Matrix – Product Market Grid
Introduction to the Ansoff matrix
The Ansoff product/ market matrix is a tool that helps businesses decide their product and market growth strategy.
Ansoff’s product/ market matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets.
The traditional four box grid or matrix Ansoff model
Alternative Ansoff style matrix
A revised version of the Ansoff matrix featuring a 3×3 or nine box grid or matrix.
History – The Product / Market Matrix
Igor Ansoff created the Product / Market diagram in 1957 as a method to classify options for business expansion. The simplisity of this model is that the four strategic options defined can be generically applied to any industry.
This well known marketing tool was first published in the Harvard Business Review (1957) in an article called ‘Strategies for Diversification’. It was consequently published in Ansoff’s book on “Corporate Strategy” in 1965.
About the Ansoff Matrix
It is used by marketers who have objectives for growth. Igor Ansoff’s matrix offers strategic choices to achieve the objectives. There are four main categories for selection.
■Market Penetration
■Market Development
■Product Development
■Business Diversification
The four main categories
Market Penetration (existing markets, existing products):
Here we market our existing products to our existing customers. This means increasing our revenue by, for example, promoting the product, repositioning the brand, and so on. However, the product is not altered and we do not seek any new customers.
Market penetration seeks to achieve four main objectives:
■Maintain or increase the market share of current products – this can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling
■Secure dominance of growth markets
■Restructure a mature market by driving out competitors; this would require a
The Ansoff product/ market matrix is a tool that helps businesses decide their product and market growth strategy.
Ansoff’s product/ market matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets.
The traditional four box grid or matrix Ansoff model
Alternative Ansoff style matrix
A revised version of the Ansoff matrix featuring a 3×3 or nine box grid or matrix.
History – The Product / Market Matrix
Igor Ansoff created the Product / Market diagram in 1957 as a method to classify options for business expansion. The simplisity of this model is that the four strategic options defined can be generically applied to any industry.
This well known marketing tool was first published in the Harvard Business Review (1957) in an article called ‘Strategies for Diversification’. It was consequently published in Ansoff’s book on “Corporate Strategy” in 1965.
About the Ansoff Matrix
It is used by marketers who have objectives for growth. Igor Ansoff’s matrix offers strategic choices to achieve the objectives. There are four main categories for selection.
■Market Penetration
■Market Development
■Product Development
■Business Diversification
The four main categories
Market Penetration (existing markets, existing products):
Here we market our existing products to our existing customers. This means increasing our revenue by, for example, promoting the product, repositioning the brand, and so on. However, the product is not altered and we do not seek any new customers.
Market penetration seeks to achieve four main objectives:
■Maintain or increase the market share of current products – this can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling
■Secure dominance of growth markets
■Restructure a mature market by driving out competitors; this would require a
References: Ansoff, I., Strategies for Diversification, Harvard Business Review, Vol. 35 Issue 5, Sep-Oct 1957, pp.113-124 Important note While Ansoff’s matrix is a useful model or framework for analysis or planning, in reality situations are rarely this clear cut. In many situations markets and products will straddle across the matrix. So like many other models – a useful framework within which to check a hypothesis – but not a rule to be followed.