3.8.1 Ansoff’s Matrix

Question 1

What is the Ansoff matrix

Answer 1

A marketing planning model that helps a business determine its product and market strategy

Question 2

What is market penetration

Answer 2

A growth strategy where a business aims to sell EXISITING products into EXISTING markets

Question 3

Aim of market penetration

Answer 3

To increase market share

By selling more existing products to the ame target customers

Get existing customers to buy more

Widen the range of existing products

Question 4

Examples of market penetration strategies

Answer 4

Aldi- rapid organic growth in the uk targeting the same customer base with new stores

Dominoes- effective use of e-commerce to encourage existing customers to buy more pizza

Question 5

Ansoffs matrix- the grid

Answer 5

Question 6

Evaluating market penetration

Answer 6

• business focuses on markets and products it knows well
• can exploit insights on what customers want (and competitors)

-unlikely to need significant new market research

• but will the strategy allow the business to achieve its growth objectives??

Question 7

What is product development (Ansofs matrix)

Answer 7

A growth strategy where a business aims to introduce new products into existing markets

Question 8

Examples of product development strategies (Ansof)

Answer 8

Coca Cola life - brand extensions are common examples of product development

Technological innovation provides significant opportunities for product development strategies

Question 9

Evaluating product development

Answer 9

• A strategy that often plays to the strengths of an established business

-Strong emphasis on effective market research (insights into customer needs) and successful innovation

• a great way of exploiting the existing customer base
• being first to market is usually important

Question 10

What is market development (Ansof)

Answer 10

A growth strategy where the business seeks to sell its EXISTING products into NEW markets

Question 11

Approaches to market development

Answer 11

-new geographical markets; eg exporting to emerging markets

-new distribution channels (eg using e-commerce and mail order)

• different pricing polices to attract new customers in different segments

Question 12

Examples of market development strategies

Answer 12

Starbucks expansion into china

Tesco market development Strachey to enter US grocery supermarket sector was a disaster for shareholders

Question 13

Evaluating market development (Ansof)

Answer 13

• a logical strategy where existing markets are saturated or in decline
• often more risky than product development- particularly expansion into international markets
• exisiting products may not suite new markets: depends on customer needs

Question 14

What is diversification (Ansof)

Answer 14

The Growth strategy where a business markets NEW PRODUCTS in NEW markets

Question 15

Examples of successful diversification

Answer 15

Tesco
Samsung

Question 16

Examples of failed diversification

Answer 16

HMV - diversified into the live entertainment market with the £40m purchase of several live music venues - exited market soon after

Question 17

Evaluating diversification

Answer 17

Inherently risky strategy
-no direct experience of product or market
- however if successful- risk is spread

Question 18

Approaches to diversification

Answer 18

• innovation & R&D : develop new solutions
  -acquire an existing business in the market
• extend an existing. Rand into the new market