BTEC Level 3 in Business
UNIT 3 - MARKETING
Graph below shows Ansoff’s Matrix strategies.
Market penetration (existing product on existing market).
Market penetration uses existing products on an existing market. This strategy tries to achieve growth of sales through encouraging brand loyalty, encouraging more purchases, taking customers from rivals and converting non-users to users. An example of this strategy is Tesco. They try encourage brand loyalty through introducing loyalty cards. In addition, they open new stores and change existing stores. Market penetration can also use other strategic options such as: Consolidation - Company focuses activity on those areas where a firm has established a competitive advantage. Withdrawal - Company tries to increase of sales of all or parts of the business. Do nothing - Company continues existing strategy
Market development (existing product on new markets).
In this strategy the company tries to achieve growth of sale through attracting new segments, using new channels of distribution and moving to new geographical areas. This strategy is more risky than market development because the company is not familiar with the needs/wants of customers on the other’s markets. A good example of market development strategy is New Look. They open new stores overseas, moving to international markets. In addition, they opened local languages websites.
Product Development (new product on existing markets).
The company using this strategy tries to grow sales through new product development, additions to product range or enter different quality levels of product. This strategy needs research about customers needs and development expenditure. However, this strategy is very useful in competitive markets where companies may need introduce differentiation to the main product. An example of Product Development is Apple. This company develops new product (Apple Watch) which is the first new product range since the first IPad.
Diversification (new product, new markets).
In this case sales growth could be achieved through company development, merger or takeover of a new business. This is the most risky strategy because it requires market and product development and the company might not have enough competencies. Mark & Spencer is an example of diversification. They are introducing online education market and also enter into partnership with Leeds University.
Marketing Techniques which Apple use.
Apple uses Product Development strategy. Apple is one of the most successful companies in marketing. Apple always offers customers high quality products and standard design. They focus on innovation and always want to be unique and because of that lots of customers always go back and new customers still coming. Every year Apple provides customers new products, which are always better than the previous one. Apple is a well-known brand so they don’t need to care about increasing brand loyalty instead of that they add to the main product differentiation. Recently Apple created a Smartwatch what is completely new line of Apple’s products. This is the first big launch since the iPad. Apple created a unique brand with wide range of products (from phones, tablets to laptops) which is well-known over all the world. However, it is very important to keep its current place in this competitive market. In case of that their strategy is market development. They create new products and adding something new to the existing main product. In this way their customers come back and at the same time they gain new potential customers. Apple have a very strong brand name and this is known globally. They created their own brand with logo which is recognizable around the word. Branding is their very strong point, all their products are synchronised and harmonized. All of the products have similar interface and style....
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