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1. Using Ansoff
Matrix to
Develop
Marketing
Strategy
DR FRED OKPALA
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2. Objectives
To Understand the Ansoff
Matrix.
Objective 1
To Understand the Four
Strategies of the Ansoff
Matrix
Objective 2
To Explain the Strategies
Using Practical examples
Objective 3
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3. What is the Ansoff
Matrix?
The Ansoff Matrix, also called the Product/Market Expansion Grid, is a tool
used by firms to analyse and plan their strategies for growth.
The matrix shows four strategies that can be used to help a firm grow and
also analyses the risk associated with each strategy.
The matrix was developed by applied mathematician and business manager
H. Igor Ansoff and was published in the Harvard Business Review in 1957.
The Ansoff Matrix’s helped many marketers and leaders understand the
risks of growing their business.

4. The Four Strategies of the Ansoff
Matrix
Market Penetration: It
focuses on increasing
sales of existing products
to an existing market.
Product Development: It
focuses on introducing
new products to an
existing market.
Market Development:
Its strategy focuses on
entering a new market
using existing products.
Diversification: It focuses
on entering a new market
with the introduction of
new products.
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5. Ansoff
Matrix
Of the four strategies, market
penetration is the least risky
while diversification is the
riskiest.

6. Market Penetration
In a market penetration strategy, the firm sells its products in the existing market. In other words, a firm is aiming
to increase its market share with a market penetration strategy.
The market penetration strategy can be done in a number of ways:
Decreasing prices to attract existing or new customers
Increasing promotion and distribution efforts
Acquiring a competitor in the same marketplace
For example, telecommunication companies all cater to the same market and employ a market penetration strategy
by offering introductory prices and increasing their promotion and distribution efforts.
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7. Product Development
In a product development strategy, the firm develops a new
product to cater to the existing market.
The move typically involves extensive research and
development and expansion of the product range.
The product development strategy is employed when firms have
a strong understanding of their current market and are able to
provide innovative solutions to meet the needs of the existing
market.

8. Product
Development
Continues
The product development strategy can be done in a number of
ways:
Investing in R&D to develop new products to cater to the
existing market
Acquiring a competitor’s product and merging resources to
create a new product that better meets the need of the existing
market
Strategic partnerships with other firms to gain access to each
partner’s distribution channels or brand
For example, automotive companies are creating electric cars
to meet the changing needs of their existing market. Current
market consumers in the automobile market are becoming
more environmentally conscious.

9. Market Development
In a market development strategy, the firm enters a new market with
their existing product(s). In this context, expanding into new markets
may mean expanding into new geographies, customer segments,
regions, etc.
The market development strategy can be successful if:
1) The firm owns proprietary technology that it can leverage into
new markets.
2) Consumers in the new market are profitable.
3) Consumer behaviour in the new markets does not deviate too far
from the existing markets.
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10. Market Development
The market development strategy can be done in a number of ways:
Catering to a different customer segment
Entering into a new domestic market (expanding regionally)
Entering into a foreign market (expanding internationally)
For example, sporting companies such as Nike and Adidas recently
entered the Chinese market for expansion. The two firms are
offering the same products to a new demographic.
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11. Diversification
In a diversification strategy, the firm enters a
new market with a new product. Although such
a strategy is the riskiest, as market and product
development is required, the risk can be
mitigated through related diversification.

12. Diversification
There are two types of diversification a firm can employ:
1) Related diversification: There are potential synergies to be realized between the existing
business and the new product/market.
For example, a leather shoe producer that starts a line of leather wallets or accessories is pursuing a
related diversification strategy.
2) Unrelated diversification: There are no potential synergies to be realized between the existing
business and the new product/market.
For example, a leather shoe producer that starts manufacturing phones is pursuing an unrelated
diversification strategy.
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13. Managing
the Risk in
Your
Growth
Strategy
Given that growth strategies can be risky, to succeed, it importance
to focus on providing a unique, superior product; a differentiated
product that delivers unique benefits and a compelling value
proposition to the customer or user. This is the number one driver of
new product profitability.
It’s critical to build a growth strategy around the notion of
competitive differences.
Focus on deeply understanding the customer’s values.
Successful execution of growth strategy demands that the firm
knows the customer.
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14. Talent &
Skills HuB
T&S-HuB is an enabling environment that supports people in
the development of their talents and skills and in the
actualisation of their personal passions and ambitions.
We help learners and individuals sharpen and exhibit their
talents and skills while exploring relevant and life changing
opportunities that suit their passions.
You can be supported by our instructors, counsellors, and
mentors on employability skills and other personal and
professional development.
Book an appointment for one-to-one or group tutoring
through our website; ts-hub.com
You can also contact us via email: contactus@ts-hub.com
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15. References and Further Learning
CFI Education Inc. (2020) Ansoff Matrix: The Product/Market Expansion Grid
[Online] available
at:https://corporatefinanceinstitute.com/resources/knowledge/strategy/ansoff-
matrix/, accessed 15/06/2020
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16. Further Support
At Talent and Skills Hub, you can be supported by our instructors, academic
skills advisors and mentors for sessions on Ansoff Matrix, other marketing
principles and study skills. You can book an appointment for one-to-one or group
tutoring through our website; ts-hub.com
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