3. shows the stages that
products go through from development to withdrawal from
the market
the range of products a
company has in development or available for consumers at
any one time , Managing product portfolio is important for
cash flow

4. • Each product may have a different life cycle
• PLC determines revenue earned
• Contributes to strategic marketing planning
• May help the firm to identify when
a product needs support, redesign,
reinvigorating, withdrawal, etc.
• May help in new product development
planning
• May help in forecasting and managing cash flow

5. • Development
• Introduction/Launch
• Growth
• Maturity
• Saturation
• Decline
• Withdrawal

7. • New ideas/possible inventions
• Market analysis – is it wanted? Can it
be produced at a profit? Who is it
likely
to be aimed at?
• Product Development and
refinement
• Test Marketing – possibly
local/regional
• Analysis of test marketing results and
amendment of product/production
process
• Preparations for launch – publicity,
marketing campaign

8. • Advertising and promotion
campaigns
• Target campaign at specific
audience?
• Monitor initial sales
• Maximise publicity
• High cost/low sales
• Length of time – type of
product

9. • Increased consumer awareness
• Sales rise
• Revenues increase
• Costs - fixed costs/variable
costs, profits may be made
• Monitor market – competitors
reaction?

10. • Sales reach peak
• Cost of supporting the product
declines
• Ratio of revenue to cost high
• Sales growth likely to be low
• Market share may be high
• Competition likely to be greater
• Price elasticity of demand?
• Monitor market –
changes/amendments/new
strategies?

11. • Searching out new markets:
• Linking to changing fashions
• Seeking new or exploiting market segments
• Linking to joint ventures – media/music, etc.
• Developing new uses
• Focus on adapting the product
• Re-packaging or format
• Improving the standard or quality
• Developing the product range

12. • Product outlives/outgrows its
usefulness/value
• Fashions change
• Technology changes
• Sales decline
• Cost of supporting starts to rise too
far
• Decision to withdraw may be
dependent on availability of new
products and whether
fashions/trends will come around
again?

13. Sales
Development Introduction Growth Maturity Saturation Decline
Time

14. Sales
Effects of Extension
Strategies
Time

15. Sales/Profits
PLC
Profits
Time
Losses
Break Even

18. products in markets experiencing high growth rates
with a high or increasing share of the market .
Potential for high revenue growth

19. High market share
Cash
Cows Low growth markets – maturity stage of PLC
Low cost support
High cash revenue – positive cash flows

20. Dogs Products in a low growth market
Have low or declining market share
(decline stage of PLC)
Associated with negative cash flow
May require large sums of money to
support

21. Problem Child:
Products having a low market share in a high growth market
Need money spent to develop them
May produce negative cash flow
Potential for the future?

22. Market Growth
High
Problem Children Stars
Dogs Cash Cows
Market Share
Low High

23. Are they worth persevering with?
Dogs
How much are they costing?
Could they be revived in some way?
How much would it cost to continue
to support such products?
How much would it cost to remove
from the market?

24. What are the chances of these
Problem products securing a hold
Children in the market?
How much will it cost to promote
them to a stronger position?
Is it worth it?

25. Huge potential
Stars
May have been expensive to develop
Worth spending money to promote
Consider the extent of their product life
cycle in decision making

26. Cheap to promote
Cash
Cows Generate large amounts of cash –
use for further R&D?
Costs of developing and promoting
have largely gone
Need to monitor their performance –
the long term?
At the maturity stage of the PLC?

27. The Ansoff Growth matrix is a tool that helps businesses
decide their product and market growth strategy.
Ansoff’s product/market growth matrix suggests that a
business’ attempts to grow depend on whether it markets
new or existing products in new or existing markets

28. Favorite definition is: "The Ansoff growth matrix assists
organizations to map strategic product market growth"
In order to make a worthwhile analysis it is also important to
consider other factors, such as the condition of the market. You
will need to know if it is in growth, decline or entering recession.
Competition levels and amount of resources available need also
to be taken into account.

29. The Ansoff Matrix was invented by H. Igor Ansoff. Ansoff was
primarily a mathematician with an expert insight into
business management
To portray alternative corporate growth strategies, Igor
Ansoff presented a matrix that focused on the firm's present
and potential products and markets (customers). By
considering ways to grow via existing products and new
products, and in existing markets and new markets,

31. Looking at it from a business perspective, the low risk option is to
stay with your existing product in your existing market: you know
the product works, and the market holds few surprises for you.
However, you expose yourself to a whole new level of risk by
either moving into a new market with an existing product, or
developing a new product for an existing market. The new market
may turn out to have radically different needs and dynamics than
you thought, and the new product may just not be commercially
successful.
And by moving two quadrants and targeting a new market with a
new product, you increase your risk to yet another level!

32. Ansoff's matrix provides four different growth strategies:
Market Penetration - the firm seeks to achieve growth with existing products in
their current market segments, aiming to increase its market share.
Market Development - the firm seeks growth by targeting its existing products
to new market segments.
Product Development - the firms develops new products targeted to its existing
market segments.
Diversification - the firm grows by diversifying into new businesses by
developing new products for new markets.

33. Market penetration is the name given to a growth
strategy where the business focuses on selling existing
products into existing markets.

34. Market penetration seeks to achieve four main objectives:
• Maintain or increase the market share of current products – this can be
achieved by a combination of competitive pricing strategies, advertising, sales
promotion and perhaps more resources dedicated to personal selling
• Secure dominance of growth markets
• Restructure a mature market by driving out competitors; this would require
a much more aggressive promotional campaign, supported by a pricing
strategy designed to make the market unattractive for competitors
• Increase usage by existing customers – for example by introducing loyalty
schemes

35. A market penetration marketing strategy is very much about
“business as usual”. The business is focusing on markets and
products it knows well. It is likely to have good information on
competitors and on customer needs. It is unlikely, therefore, that
this strategy will require much investment in new market
research.

36. Market development is the name given to a growth strategy where the
business seeks to sell its existing products into new markets.
There are many possible ways of approaching this strategy, including:
• New geographical markets; for example exporting the product to a
new country
• New product dimensions or packaging
• New distribution channels
• Different pricing policies to attract different customers or create new
market segments

37. Product development is the name given to a growth strategy
where a business aims to introduce new products into existing
markets. This strategy may require the development of new
competencies and requires the business to develop modified
products which can appeal to existing markets

38. Diversification is the name given to the growth strategy where a
business markets new products in new markets.
This is an inherently more risk strategy because the business is
moving into markets in which it has little or no experience.
For a business to adopt a diversification strategy, therefore, it
must have a clear idea about what it expects to gain from the
strategy and an honest assessment of the risks.