Product

Question 1

Diversification

Answer 1

• means selling new products in a new market. Diversification is a risky strategy. It’s used when a business really needs to reduce their dependence on a limited product range or if high profits are likely

Question 2

Product development

Answer 2

• Is selling new products to existing markets.
• used when the market has growth potential and the business has a high market share, strong research and development and a good competitive advantage

Question 3

Market development

Answer 3

• Is selling existing products to new markets for new market segments or new geographical areas
• it’s relevant to a business with a strong product and strong capacity
• can be risky unless the business have spotted a clear new market opportunity

Question 4

Market penetration

Answer 4

• means trying to increase your market share in your existing market

E.g if a company makes watching powder and currently has 25% market share it may try to achieve 30% market share using:
- sales promotions
- pricing strategies
- advertising
This strategy works best in a growth market