Ansoffs Matrix Notes
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
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