Ansoff Matrix

Ansoff Matrix

1. The Ansoff matrix is a marketing planning model that helps a business determine its product and marketing strategy.

2. Market Penetration : A growth strategy where a business aims to sell existing products into existing markets.

   • The aim of market penetration is to increase market share.
   • They can achieve this by selling more existing products to the same target customers.
   • Gettingexisting customers to buy more will increase market share and so will widening the range of existing products.
   • Business focuses on markets and products it knows well / can exploit insights on what customers want / unlikely to need new market research

3. Product Development : A growth strategy where a business aims to introduce new products into existing markets.

   • A strategy that often plays to the strengths of an established business.
   • Strong emphasis on effective market research and successful innovation.
   • A great way of exploiting the existing customer base.
   • Being first to the market is usually important.

4. Market development : A growth strategy where the business seeks to sell its existing products into new markets.

   • Approaches market development
     • New geographical markets
     • New distribution channels
     • Different pricing policies to attract new customers in different segments
   • Evaluating market development
     • A logical strategy where existing markets are saturated or in decline.
     • Often more risky than product development.

5. Diversification : The growth strategy where a business markets new products in new markets.

   • Very risky strategy as there is no direct experience of the product or market already.
   • Few economies of scale.
   • Approaches to diversification : Innovation / Acquire an existing business in the market / extend an existing brand into a new market.

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