Ansoffs Product-Market Expansion GridCompany first preference to check whether they can gain more market share with their currentproducts in their current markets (Market penetration). Next it will find whether they can find newmarket for the current products ( Market Development).Then it consider their is a place to get share byintroducing new products in the current market(Product Development). At last if all the strategies arenot feasible in current company environment then produce new products for new market which needslot of budget and efforts (Diversification)Market penetration strategyThe first strategy company is looking to adapt for increasing their sales and profits. Marketingefforts of the company to offer their existing products in the current markets is called marketpenetration strategy. The best way to do is to attract competitors customer and looking forpotential customer for the existing products.The penetration that brands and products have can be recorded by companies such as ACNielsenand TNS who offer panel measurement services to calculate this and other consumer measures.In these cases penetration is given as a percentage of a country¶s households who have boughtthat particular brand or product at least once within a defined period of time.
Market Penetration FigureExamples of Market penetration strategyRecognizing that software as a service can be a potent market penetration tool, Dell isassembling a services portfolio that now includes e-mail disaster recovery, spam/virus filteringand archiving via its MessageOne acquisition.Southwest airline in the current market by offering flights for the small distance cities.According to Peter Wilson of High Definition & Digital Cinema Ltd., in terms of marketpenetration HD televisions were present in only 17.percent of U.S. households last year, a number that will grow to 22 percent this year and willexceed 55 percent in 2008.Pakistan State Oil penetrate in Pakistan market from 40% to 65% in the duration of 4 years bydeveloping new retail outlets.Market development StrategyDeveloping a new market for the existing company product is called market developmentstrategy.This is the process of finding new market for the new customer to increase company
performance by increasing sales and profits. Companies can develop market on geographicalsuch as city,country,region,state etc and demographical such as age,sex,gender,class etc.Market Development FigureA marketing manager has to think about the following questions before implementing a marketdevelopment strategy: Is it profitable? Will it require the introduction of new or modifiedproducts? Is the customer and channel well enough researched and understood? The marketingmanager uses these four groups to give more focus to the market segment decision: existingcustomers, competitor customers, non-buying in current segments, new segments.Market development strategy examplesPakistan State Oil(PSO) developing new market by exporting oil to Afghanistan.Chinese products developed new market for their product worldwide.Product Development StrategyDeveloping or modifying new products and offering to the existing market is called productdevelopment strategy. This strategy takes time and money for developing a new product.Marketing Manager must conduct a detailed survey to find out whether it is feasible to introducenew product in the current market
Product Development FigureProduct development strategy examplesGoogle developed a new browser Chrome for the existing Internet user.McDonalds is always within the fast-food industry, but frequently markets new burgers.Diversification StrategyDiversification Strategy is the development of new products in the new market. Diversificationstrategy is adopted by the company if the current market is saturated due to which revenues andprofits are lower. At the corporate level, it is generally very risky and interesting strategy forentering a promising business outside of the scope of the existing business unit.Diversification Strategy FigureDiversification strategy examplesVirgin Media moved from music producing to travels and mobile phonesWalt Disney moved from producing animated movies to theme parks and vacation properties
Canon diversified from a camera-making company into producing whole new range of officeequipment.