...Leadership Product and market options: Ansoff product-market matrix Case scenarios 2014 Authors: Delyth Samuel and Samantha Winter (updated by Anne Gleeson) Published by Deakin University on behalf of CPA Australia Ltd, ABN 64 008 392 452 © CPA Australia Ltd 2014 The contents are for general information only. They are not intended as professional advice, for that you should consult a suitable qualified professional. CPA Australia Ltd expressly disclaims all liability for any loss or damage arising from reliance upon any information in these papers. Contents Questions Ansoff product-market matrix Tasks Task 1: Australian Leisure Resorts Task 2: Life’s Little Luxuries Task 3: You Name It! Equipment Hirers 5 6 6 7 8 9 Solutions Task 1: Australian Leisure Resorts Task 2: Life’s Little Luxuries Task 3: You Name It! Equipment Hirers 10 11 13 15 Questions PRODUCT AND MARKET OPTIONS: ANSOFF PRODUCT–MARKET MATRIX Ansoff product-market matrix A model for assisting in the identification and assessment of strategic options is the Ansoff product-market matrix. The Ansoff product-market matrix looks at options from an organisation’s perspective based on two dimensions: product focused and market focused. The term product may refer to a service rather than a physical item, as well as physical products. The market dimension considers geographic markets, as well as customer markets and customer groups. The four quadrants of the Ansoff product-market matrix are:...
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...PCEM 008 Market Research and Management of Technology and Development Ansoff’s Matrix Report Prepared By: Eng. Mohamed Wagdy Under Super Vision of: Dr. Ashraf Tallat Ansoff's Matriex The Ansoff Matrix was developed by H. Igor Ansoff and first published in the Harvard Business Review in 1957,in an article titled "Strategies for Diversification." It has given generations of marketers and business leaders a quick and simple way to think about the risks of growth. The purpose of this matrix is to help managers consider how to grow their business through existing or new products or in existing or new markets. In this way he was helping managers to assess the differing degrees of risk associated with moving their organization forward. Ansoff’s matrix suggests four alternative marketing strategies which hinge on whether products are new or existing. They also focus on whether a market is new or existing. Within each strategy there is a differing level of risk. The four strategies are: 1. Market penetration – This involves increasing market share within existing market segments. This can be achieved by selling more products/services to established customers or by finding new customers within existing markets. is the safest of the four options. Here, you focus on expanding sales of your existing product in your existing market. 2. Product development – This involves developing new products for existing markets. Product development...
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...has given generations of marketers and business leaders a quick and simple way to think about the risks of growth. Sometimes called the Product/Market Expansion Grid, the Matrix shows four strategies you can use to grow. It also helps you analyze the risks associated with each one. The idea is that, each time you move into a new quadrant (horizontally or vertically), risk increases. The Ansoff Matrix is a strategic planning tool that provides a framework to help executives, senior managers, and marketers devise strategies for future growth. Growth Strategies: Ansoff, in his 1957 paper, provided a definition for product-market strategy as "a joint statement of a product line and the corresponding set of missions which the products are designed to fulfill". He describes four growth alternatives: 1 Market penetration: In market penetration strategy, the organization tries to grow using its existing offerings (products and services) in existing markets. In other words, it tries to increase its market share in current market scenario. This involves increasing market share within existing market segments. This can be achieved by selling more products or services to established customers or by finding new customers within existing markets. Here, the company seeks increased sales for its present products in its present markets through more aggressive promotion and distribution. This can be accomplished by: 1) 2) 3) 4) Price reduction. Increase in...
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...potential products and markets (customers). By considering ways to grow via existing products and new products, and in existing markets and new markets, there are four possible product-market combinations. Ansoff's matrix is shown below: Ansoff Matrix | |Existing Products |New Products | |Existing | | | |Markets | | | | |Market Penetration | Product Development | |New | | | |Markets | | | | | Market Development |Diversification | Ansoff's matrix provides four different growth strategies: • Market Penetration - the firm seeks to achieve growth with existing products in their current market segments, aiming to increase its market share. • Market Development - the firm seeks growth by targeting its existing products to new market segments. • Product Development - the firms develops new products targeted to its existing market segments. • Diversification - the firm grows by diversifying into new businesses by developing new products for new markets. ...
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...are- 1- Market penetration occurs when the company or organisation tries to sell more of its current or existing products to its existing markets through greater promotional efforts or vigorously advertisings. In the end the organisation will be benefiting from a increase in annual turnover and sales. This is the cheapest strategies of all Ansoff’s business strategic models. It also encourages companies to stay on existing market. There were a lot of competitors in this market but this strategy help JD Weatherspoon to reduce competition from rivalry. 2- Market development this happens when the company or organisation tries to sell its existing products in the new market or segment, for example if a Scottish organisation tries to enter into regional or global market to sell their existing products. This also helps the organisation to increase its base by attracting new Customers and increase its market share and portfolio. Favourable economic conditions and social culture changes force JD to adopt this strategy. 3- Product development this type of strategy occurs when the organisation starts to offer new products to the existing customer, so by bringing new products to the market, the organisation will be also attracting new customers. This also helps to keep its customers attracted to the organisation and its products e.g. Xbox 360 which has introduced Xbox 360 +kinetic improving the quality and and strength of the product and increasing product range for the...
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...explanation of how to determine which is best for your business. Igor Ansoff suggested that business owners’ ability to grow their businesses comes down to how they market new or existing products in new or existing markets. He outlines four distinct strategies: - Market Penetration – selling more of the same things to more of the same customers - Market Development – selling more of the same things to different customers - Product Development – selling new products or services to the same customers - Diversification – selling new products or services to different customers Using Ansoff’s matrix, business owners can evaluate each of the growth strategies in turn to assess which is likely to result in the best possible return. Market Penetration Market penetration is the easiest way to grow in an expanding market. However, it becomes more difficult as the market matures and competition increases. The obvious step is to increase advertising or add more sales people to increase sales. Alternatively, business owners can win business from competitors through competitive pricing, discounting, vouchers or other offers. Business owners can also boost sales by providing additional incentives to sales staff through commissions, bonuses or other reward schemes or by introducing customer loyalty schemes. But market penetration can also be increased by initiatives that increase usage. Look, for example, at how toothpaste manufacturers increased usage by introducing pump-action toothpaste...
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...and consists of publishing and information businesses. Second, Elsevier Reed Finance BV which manages the financing activities and is owned 61% by Reed Elsevier NV and 39% by Reed Elsevier PLC. Both of the parent companies have attained their separate identity and are listed separately in the stock market. The company started as two separate organisations, Reed Elsevier plc was started as Reed International and was laid down by Albert E Reed in 1894 in Kent as a newsprint manufacturer. The company underwent several acquisitions to diversify in its operation to finally reorganizing its portfolios and becoming the most recognized company in the publishing industry. On the other hand, Reed Elsevier NV started off as Elsevier NV was formed by Jacobus George Robbers in 1880 as a Dutch publisher which gained support from well known Dutch booksellers and newspapers, later concentrating on business publishing activities and disposing the commercial and book publishing activity. In 1993, both these companies contributed their expertise to form a two jointly owned company, Elsevier Reed Finance & Reed Elsevier Group plc. Parent Companies Reed Elsevier provides diversified products and services to its customers which help in the advancement of technology, betterment in criminology, medical and scientific fields. Each of the Reed Elsevier group of companies provides a unique solution to its customers and is successful in its own...
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...fruit products. PFL sells to retailers and food service outlets. PFL is also involved in a small amount of export. Recently PFL won a contract to provide one of its product lines to Petrol and convenience channel. The industry is the Australian Frozen Food industry. Core activities are not discussed in the case study. It can be assumed core activities are Raw Materials -> Processing -> Product -> Distribution Product segments are Savoury, Dessert and fruit products. b) No information about industry life cycle. c) No information about TEMPLES factors affecting the historical growth d) No information about TEMPLES factors affecting the future industry growth e) No information about historical industry profitability f) No information about future industry profitability g) No information given about the competitors h) Stakeholders Rijs family members in board Managing Director Employees Major supermarkets ------------------------------------------------- Foodservice outlets Key Strategic issues ------------------------------------------------- No information Strategic options Patties win contract to sell pies at BP sites Market Penetration – Existing products into new market Patties will be launching their successful product range from Four’N Twenty and Herbert Adams at convenience reliance petrol stations exclusively. This will be considered market penetration due to the strategy of selling existing products in a new market...
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...potential of alternative product-market strategies. We called it Asnoff`s product market expansion gird. Asnoff`s product market expansion gird: Marketing planning tool which usually aids a business in determining its product and market growth. determined by focusing on whether the products are new or existing and whether the market is new or existing. Alternatives marketing strategies 1234- Existing products to existing market New products to existing market Existing products to new market New products to new market 1-Market penetration This strategy focus on selling your current product range to your existing market in order to increase your market share. In this strategy we focus on promotional activities and pricing offers to increase customers demand. Also royalty programs will help in increasing usage of our current customers to the product. Or by Driving out competitors by buying small companies or Making competition more difficult to them by pricing strategies . Example : -Airways royalty programs (Mile program) , 2-Product development Product development strategy including developing a new product , modifying the current products or brand extension. This strategy require continues R&D investments. Also the company must make market research and focus groups to know more about current customers needs and buying habits. Different approaches for product development Brand Extension Using customer loyalty to the brand to develop new products with same brand. Example :Dettol...
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...the marketing analytical tools we have covered in the previous chapter. In a practical way, we are going to transform the analytical findings from the past year into marketing objectives for next year. Chapter 2 out of 4 Marketing Objectives 3 2. Marketing strategic planning & objectives Past year analysis 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Next year’s objectives 2.1 Marketing strategic Environmental analysis Market analysis Competitive analysis Segmentation Marketing-mix SWOT analysis Positioning planning 2.2 Desired segmentation 2.3 Desired marketing-mix 2.4 SWOT-driven objectives 2.5 Perceptual gaps 1.8* Sources of info (research) 2.6 Sales forecast *Comment: the only section in chapter ONE that does not transform into an objective in chapter TWO is 1.8 Chapter 2 out of 4 Marketing Objectives www.MarketingPlanNOW.com 4 2.1 Marketing strategic planning Past year analysis 1.1 1.2 1.3 Next year’s objectives 2.1 Marketing strategic Environmental analysis Market analysis Competitive analysis planning A matrix called Product Market Growth Matrix, known more as Ansoff Matrix (Igor Ansoff, 1957) is a basic tool to clarify what is marketing strategic planning and how to use it. The background considerations of this model are to do with the following analysis: Business...
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...marketing techniques are used to market products and evaluate the effectiveness in two organisations (Sainsbury and Samsung). These companies use marketing techniques such as branding, relationship marketing and growth matrix. Branding Branding is very important to marketing because it helps establish a product in a market and build the brand. Most brands have certain things that make them noticeable like a logo or a slogan for example Samsung has their name in bold writing on their products like phones and TV’s and Sainsbury also use their name they do this so people will know what product they have, is known for its orange colour and name also one of their many slogans “live well for less” they have been massively successful, their logo is recognized very in the U.K. Sainsbury’s has made strong uses of is the color and text. The color and text is smooth and comforting, and when these colors are seen, they make you think of Sainsbury’s which make customers think that of their cheap and good quality products. All Sainsbury’s products have the logo on it even the bags so when someone has a Sainsbury’s product they know that their product are from Sainsbury’s and therefore it acts as advertising which is very successful. Both companies take their branding very seriously and both have similar logos however consumers recognise Sainsbury’s most of the time because of their colour and slogan * Live well for less * Try something new today * Making life taste...
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...namely product and market 4. Four generic growth strategies are identified: Market Penetration - OLD M OLD P -The firm seeks to achieve growth with existing products in their current market segments, aiming to increase its market share. -less risky cause it leverages firm's existing resources and capabilities Challenge: Market is Saturated Strategies: Increase usage by existing customers Attract customers away from rivals Encourage increase in frequency of use Encourage non buyers to buy Use when… the market is not saturated There is growth in the market Competitors' share of the market is failing Product Development - OLD M NEW P -this strategy is appropriate if the firm's strengths are related to its specific customers rather than specific product itself. New products to replace current products New innovative product Product improvements Product line extensions New product to compliment existing products Use when… The firm has strong R&D capabilities The market is growing There is rapid change The firm can build on existing brands Competitors have better products Market Development - NEW M OLD P The firm seeks growth by targeting its existing products to new segments. -pursuit of additional market segments or geographical regions -core competencies Change distribution channels Different pricing policy Now promotional strategies Use when… Untapped markets The firm has excess capacity There are attractive channels to access new market Diversification...
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... 1. Market Strategy 2. Product and Service Strategy 3. Organization Strategy 4. People Strategy 5. Finance Strategy 3. Ansoff Matrix – Applied Strategies to four different senarios 1. General Information 2. Product Penetration 3. Product Development 4. Market Development 5. Diversification 4. Conclusion 1. Introduction Strategies are often being used to adapt to different scenarios in the market and push the company in the better situation to handle the new and often inexperienced environment. They are specifying the organization’s mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives. The wide rage of strategies, in every field/part in an organization, allows companies to find the right strategy for implementation in different kinds of scenarios. 2. Strategies in General 1. Market Strategy Market strategy is an essential part of the strategic management, in order for companies to succeed in the comparative market that exists today. This strategy takes in account the company’s relationship to existing and potential customers, its knowledge of changing needs, and the consciousness and reaction of opportunities they have in the market. It is necessary to determine the unique strengths of the company, and use this information in marketing and sales efforts. The relationship to existing and potential...
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...Coca-Cola • Developing product ranges and Ansoff's matrix Introduction The Coca-Cola Company is the world’s leading seller of soft drinks. In Great Britain, the company offers over 20 brands (nearly 80 products), including Oasis, Sprite and, of course, its best seller, Coca-Cola. It sells a range of products to meet a broad range of consumer needs. But how does it decide what new products to sell and who to sell them to? Market research First it looks at its market. It divides this into slices or segments to identify different groups of consumer needs. Market research then finds out what each segment wants. Market research may be: • primary - using new data or • secondary - using sources that have already been published. Stages Research by Coca-Cola Great Britain is carried out in five stages: 1. Desk research to see where there might be a gap in the market. 2. Detailed research using small groups of ‘typical’ consumers. This is to see exactly what might be wanted. For instance, it might look at a new product or pack size. This is an example of qualitative research. 3. Large scale surveys to collect information to see which type and design of product is likely to have the most appeal. This is an example of quantitative research. 4. Trials in a test market to see if the consumer likes the product. 5. Tracking the success of the product once it is launched. Deciding Once the company identifies there is a need, Coca-Cola has to decide how it is...
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