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48961349 01-ansoff’s-matrix
48961349 01-ansoff’s-matrix
48961349 01-ansoff’s-matrix
48961349 01-ansoff’s-matrix
48961349 01-ansoff’s-matrix
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48961349 01-ansoff’s-matrix
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48961349 01-ansoff’s-matrix
48961349 01-ansoff’s-matrix
48961349 01-ansoff’s-matrix
48961349 01-ansoff’s-matrix
48961349 01-ansoff’s-matrix
48961349 01-ansoff’s-matrix
48961349 01-ansoff’s-matrix
48961349 01-ansoff’s-matrix
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48961349 01-ansoff’s-matrix

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  • Productivity improvements in the things we sell, the processes we use to sell themIncrease productivity by market share growthServing customers betterIncrease productivity by market growth
  • Eg: tata cars after tata heavy vehiclesBanks developing insurance products
  • Develop related products or services (for example, a domestic plumbing company might add a tiling service – after all, if customers who want a new kitchen plumbed in are quite likely to need tiling as well!)
  • Transcript

    • 1. ANSOFF’SMATRIX
    • 2. IGOR ANSOFF’s MATRIX MarketProdu EXISTING NEWctEXIST MARKET MARKET PENETRATION DEVELOPMENT •Increase sales to existing market •Existing products sold to new •Penetrate existing market more markets deeplyNEW NEW PRODUCT DIVERSIFICATION •New Products sold to new DEVELOPMENT markets •New products developed for existing markets
    • 3. IGOR ANSOFF MATRIX MKTPROD EXISTING NEWUCTEXIST MARKET PENETRATION MARKET •Little risk DEVELOPMENT •Moderate RiskNEW NEW PRODUCT DIVERSIFICATION DEVELOPMENT •High Risk •Moderate Risk
    • 4. IGOR ANSOFF MATRIX – Growth of TESCO MKTPROD EXISTING NEWUCTEXIST MARKET PENETRATION MARKET DEVELOPMENT •Increase in share of grocery •Move into convenience business at the expense of store market Sainsbury •Expansion abroadNEW NEW PRODUCT DEVELOPMENT DIVERSIFICATION •Expansion into Petrol Sales •High Risk •Development of financial services
    • 5. Market Penetration Maintain increase market share in current market with current products Selling more of the same to the same people In saturated market - Difficult In stagnant market – grab market share from others – intense competition
    • 6. Market Penetration Increase usage by existing customers Encourage increase in frequency of use Attract customers away from rivals / Gain market share at expense of rivals Devise and encourage new applications Encourage non-users to buy
    • 7. Market Penetration
    • 8. Use Market Penetration when - When the market is not saturated When there is potential of growth When competitors share is falling When increase in volume leads to economies of scale When there is scope to sell more to existing users
    • 9. Market-Penetration Strategy  Why ? To dominate market  How ? To increase usage or get new customers; reduce price; expand distribution or increase promotional activities  When ? When market is growing  What to look out for ? Competitive reaction; cost of conversion  Example: Airlines used reduced fares & promotion various family travel packages to penetrate market
    • 10. PRODUCT-MARKET STRATEGIES A product- (new offering-) development strategy dictates that an organization create new offerings  existing markets.
    • 11. PRODUCT-DEVELOPMENT STRATEGY This strategy involves: Product Developing totally new offerings. Innovation Product Enhancing the value to customers Augmentation of existing offerings. Product Adding different features, sizes, etc. to broaden the Line Extension existing line.
    • 12. Product Development Strategy New product to replace old product New innovative products Product improvements Product line-extensions New products to complement existing Products at a different quality level from existing product
    • 13. PRODUCT-DEVELOPMENT STRATEGY Factors to consider when adopting this strategy:  The market size and volume needed for profitability.  The magnitude and timing of competitors’ responses.  The impact of the new product on the sales of existing offerings (cannibalization).  The capacity of the organization to deliver the offerings to the market(s).
    • 14. Product-DevelopmentStrategy  Why ? To satisfy buyer’s need  How ? New or improved product; innovate or augment product  When ? Customer has a need or a problem  What to look out for ?  Market size/volume  competitor reaction  effect on existing products  resources to deliver new products
    • 15. IGOR ANSOFF MATRIX MKTPROD EXISTING NEWUCTEXIST MARKET PENETRATION MARKET •Little risk DEVELOPMENT •Moderate RiskNEW PRODUCT DEVELOPMENT DIVERSIFICATION •Moderate Risk •High Risk
    • 16. PRODUCT-MARKET STRATEGIES A market-development strategy dictates that an organization introduce its existing offerings to markets other than those it is currently serving (existing offerings  new markets).
    • 17. Market Development Strategy Selling the same product to different market Entering new markets, segments with existing products Gaining new customers, new segments, new markets Requires changes in marketing strategy, distribution, pricing policy, promotional strategy
    • 18. Use market development when Untapped market is beckoning The firm has excess capacity Attractive channels to access new markets
    • 19. MARKET-DEVELOPMENT STRATEGY This strategy involves:  Adjusting the marketing mix, such as: • Modifying the basic product offering • Using different distribution outlets • Changing the sales effort or advertising  Analyzing competitors’ strengths, weaknesses, and potential for retaliation.
    • 20. MARKET-DEVELOPMENT STRATEGY This strategy involves (continued):  Identifying the number, motivation, and buying patterns of new buyers.  Determining the organization’s ability to adapt to new markets to evaluate success.
    • 21. MARKET-DEVELOPMENT STRATEGY Internationally, this strategy has four forms: Exporting Licensing Joint Venture/ Direct Strategic Alliance Investment
    • 22. MARKET-DEVELOPMENT STRATEGY Involves marketing the same offering in another Exporting country through sales offices or intermediaries. Is a contract where one firm (licensee) is given the Licensing rights to patents, trademarks, etc. by the owner (licensor) in turn for a royalty or fee. Involves investment by both a foreign firm and a Joint Venture/ local company to create a new entity in the host Strategic Alliance country. The two forms share ownership, control, and profits of the entity. Involves investing in a manufacturing and/or Direct assembly facility in a foreign market. Is the most Investment risky and requires the most commitment.
    • 23. Market-Development Strategy Why ? To venture into new markets How ? Sell existing products in new markets; modify product; use different distribution; use different advertising/sales strategy When ? Present market is saturated What to look out for ? Competitive reaction; understand new buyers; adaptability
    • 24. IGOR ANSOFF MATRIX MKTPROD EXISTING NEWUCTEXIST MARKET PENETRATION MARKET •Little risk DEVELOPMENT •Moderate RiskNEW PRODUCT DEVELOPMENT DIVERSIFICATION •Moderate Risk •High Risk
    • 25. Diversification New products sold to new markets New products sold to new customers Select based on growth prospects which the two new variables offer that the present product-market does not
    • 26. Diversification Types Related  Unrelated Beyond present  Entirely new product product –market, but and market within present  Conglomerate industry diversification Synergistic diversification Lesser risk
    • 27. Related Diversification Horizontal – new products introduced to current markets (new product development) Vertical – when an organization moves into its supplier’s or customer’s business Concentric – when new products closely related to existing products are introduced in new markets
    • 28. Diversification Strategy (cont’d)  Three types of diversification  Concentric, horizontal and conglomerate  Three essential tests of success  Attractiveness  Cost-of-entry  Better-off
    • 29. Vertical Integration Why?  To gain operating economies i.e. to lower costs  To gain access to or control supply demand  To enhance technological innovation How? Integrate backward and forward When? Basic industry is in a growth stage What to look out for? Problems in managing very different businesses; increase risk, reduced flexibility; cost of excessive in-growing
    • 30. Example of Vertical Integration  Airlines integrate backward to in-flight kitchens; forward to travel agencies
    • 31. Related Diversification Development beyond present product market mix but within the broad confines of the industry
    • 32. Diversification Strategy Why ? Growth opportunities outside current business How ? New products for new markets When ? Distinctive competencies available What to look out for ? High risks, resources required, need to understand new markets, fit with distinctive competencies
    • 33. Uses of Ansoff’s Matrix A framework to explore directions for strategic growth Most commonly used model for strategic growth Identify and analyze growth opportunities Considers expected returns and risks
    • 34. To Summarize
    • 35. Market Penetration Advertise - to encourage more people within your existing market to choose your product, or to use more of it Introduce a loyalty scheme Launch a price or other special offer promotions Increase your sales force activities Buy a competitor company (particularly in mature markets)
    • 36. Product Development Extend your product by producing different variants, or packaging existing products it in new ways Develop related products or services In a service industry, shorten your time to market, or improve customer service or quality
    • 37. Market Development Target different geographical markets at home or abroad Use different sales channels, such as online or direct sales if you are currently selling through the trade Target different groups of people, perhaps with different age, gender or demographic profiles from your normal customers.
    • 38. Modified Ansoff Matrix – 9 Box GridProduct – Existing Modified NewMarketExisting Market Product Product Penetration Extension DevelopmentModified Partial Limited Market Diversificatio Diversificatio Expansion n nNew Partial Market Diversificatio Diversificatio Development n n
    • 39. Strategy Selection
    • 40. STRATEGY SELECTION Product-market strategies are evaluated based on:  The organization’s business definition, mission, and capabilities.  Market capacity and behavior.  Environmental forces.  Competitive activities.
    • 41. STRATEGY SELECTION Product-market strategies are chosen based on:  Costs and benefits of a strategy.  Probabilities of success for a strategy.  Analysis of competitive structure, market dynamics, and opportunity costs.  The product itself.
    • 42. EXHIBIT 1.3: DECISION-TREE FORMAT Action Response Outcome R1 O1 A1 R2 O2 R1 O3 A2 R2 O4
    • 43. EXHIBIT 1.4: SAMPLE DECISION-TREE Action Response Outcome Aggressive Estimated profit Market- competition of $2 million penetration strategy Passive Estimated profit competition of $3 million Aggressive Estimated profit Market- competition of $1 million development strategy Passive Estimated profit competition of $4 million
    • 44. THE MARKETING MIX Communication Aggressive Strategy competition Product Channel Customer Strategy Aggressive Strategy competition Passive competition Price Strategy
    • 45. THE MARKETING MIX Product Kind of product, service, or idea offered. Strategy How the product, service, or idea will be profit Estimated Communication communicated to buyers. Informsof$3 assures and million Strategy buyers that the offering will meet their needs. Method for distributing the product or service to Channel buyers. Satisfies buyers’ shopping patterns and Aggressive Strategy competition purchase requirements. Provides information and offering availability. Estimated profit Price of $4 million Amount buyers will pay for the offering. Strategy Represents the value or benefits provided.
    • 46. FORMULATING THE MARKETING MIX  Depends on the success requirements of the market.  Delivers customer value in Estimated profit marketspace, the of$3 million new interactive capabilities of the Internet. Aggressive  Must be consistent with both the needs of the competition markets and the organization’s capacity. profit Estimated of $4 million  Is as much art and science.
    • 47. CHAPTER 1: FOUNDATIONS OF STRATEGICMARKETING MANAGEMENT BUDGETING MARKETING, FINANCIAL, AND PRODUCTION RESOURCES
    • 48. BUDGETING A budget is a formal, quantitative expression of an organization’s planning and strategy initiatives expressed in financial terms.
    • 49. BUDGETING A master budget consists of: Focuses on the income statement. Operating Also referred to as a pro forma income statement or profit Budget plan. Financial Focuses on the effect the operating budget has on the Budget organization’s cash position. Focuses on developing advertising, Special sales, and other budgets that support Budgets the master budget.
    • 50. CHAPTER 1: FOUNDATIONS OF STRATEGICMARKETING MANAGEMENT DEVELOPING REFORMULATION AND RECOVERY STRATEGIES
    • 51. MARKETING AUDIT A marketing audit is a comprehensive, systematic, and periodic examination of a firm’s or business unit’s marketing environment, objectives, strategies, and activities to determine problem areas and opportunities and recommend a plan of action to improve the firm’s marketing performance.
    • 52. MARKETING AUDIT Addresses the following questions: Strategic Are we doing the right things? Operational Are we doing things right?
    • 53. REFORMULATION AND RECOVERYSTRATEGIES Have the following purposes:  Forces marketing managers to ask “What if…?” questions.  Allows for contingency plans, preplanning of reformulation and recovery strategies that lead to faster reaction time in implementing remedial action.
    • 54. CHAPTER 1: FOUNDATIONS OF STRATEGICMARKETING MANAGEMENT DRAFTING A MARKETING PLAN
    • 55. MARKETING PLAN A marketing plan is a formal, written document that describes the context and scope of an organization’s marketing effort to achieve defined goals or objectives within a specific future time period.
    • 56. MARKETING PLAN  Consists of: Business Marketing Product Plan Plan Plan  Each has these time dimensions: Short-term Focuses on a 1-year period. Long-term Focuses on a 3- to 5-year period.

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