Nestle Ansoff Matrix

Topics: Marketing, New product development, Market penetration Pages: 6 (1791 words) Published: October 19, 2010
Introduction of Ansoff Matrix
This well known marketing tool was first published in the Harvard Business Review (1957) in an article called 'Strategies for Diversification'. It is used by marketers who have objectives for growth. Ansoff's matrix offers strategic choices to achieve the objectives. There are four main categories for selection.

The market penetration strategy is the least risky since it leverages many of the firm’s existing resources and capabilities. In a growing market, simply maintaining market share will result in growth, and there may exist opportunities increase market share if competitors reach capacity limits. However, market penetration has limits, and once the market approaches saturation another strategy must be pursues if the firm is to continue to grow. Market development options include the pursuit of additional market segments or geographical regions. The development of new market for the product may be good strategy if the firm’s core competencies are related more to the specific product than to its experience with a specific market segment. Because the firm is expanding into a new market, a market development strategy typically has more ricks then a market penetration strategy. A product development strategy may be appropriate if the firm’s strengths are related to its specific customer rather than to the specific product itself. In this situation, it can leverage its strengths by developing a new product targeted to its existing customer. Similar to the case of new market development, new product development carries more rick then simply attempting to increase market share. Diversification is the most risky of the four growth strategies since it requires both products and market development and may be outside the core competencies of the firm. In fact, this quadrant of the matrix has been referred to by some as the “suicide cell”. However, diversification may be a reasonable choice if the high risk is compensated by the chance of a high rate of return. Other advantage of diversification include the potential to gain a foothold in an attractive industry and the reduction of overall business portfolio risk. Ansoff's matrix is one of the most well know frameworks for deciding upon strategies for growth. Market Penetration

Market penetration occurs when a company enters/penetrates a market with current products. The best way to achieve this is by gaining competitors' customers (part of their market share). Other ways include attracting non-users of your product or convincing current clients to use more of your product/service Nestle wan one for their product-Milo to make more well-known all over the world in order to gaining competitors customer in nutrition drinks region. Therefore Nestle make a lot of promotion and using different way such as advertising, through television, internet, newspaper and so much more to recall from customer their mind. For example, A lucky draw to put a lucky number behind the packaging and the end of the month, the will pick a lucky number and the lucky customer can redeem their price at the nearest Milo’s branch. Nestle try to encourage its current customers to buy more products per period. They bring out the image that if customers purchase Nestle drinks products infrequently present could be shown the benefits of drinking, more consume can get more power or energy. Besides that, the product can make a different packaging style. They have design many kind of side packaging in order to satisfy different request of customer. By doing this style of packaging, Nestle can promote their entire delicious product to the customer so that they are able to try all the product that produced by Nestle.

If a product has a high demand, it will attract other producer to produce the same or even better product. As a result, there will be a lot of competitors and competition. So Nestle will ‘fighting’ with each other to make their product more well-known or more...
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