Marketing strategy and Ansoff
Ansoff's matrix
- A marketing strategy is the long-term plan for marketing to meet objectives.
- Ansoff's matrix shows four ways to grow; risk rises as you move away from what you know:
| Existing products | New products | |
|---|---|---|
| Existing markets | market penetration | product development |
| New markets | market development | diversification |
- Market penetration is safest; diversification is riskiest (new product and new market).
Practice
Selling more of an existing product to existing customers is Ansoff's:
Existing product + existing market = market penetration (the safest strategy).
Practice
The riskiest Ansoff strategy is:
Diversification is riskiest because both the product and the market are new.
Product portfolio
- Product portfolio analysis looks at the whole range together (e.g. the Boston Matrix).
- A firm needs steady earners to fund risky new products — a healthy, balanced mix.
Practice
A balanced product portfolio uses steady earners to fund riskier new products.
Cash cows (steady earners) fund stars and question marks, keeping the portfolio healthy.
You've got it
Key idea
- Ansoff: market penetration / product development / market development / diversification (riskiest)
- market penetration = sell more to current buyers (safest)
- a product portfolio needs balance — steady earners funding risky newcomers