Similarly, telecommunication operators that cater to the same market employ a market penetration strategy by offering introductory prices, running promotion campaigns, increasing their distribution channels through supermarkets, bundling their subscription plans with hardware, etc. In addition, they also try to leverage their distribution channels by making attractive deals with a large variety of distributors, such as supermarkets, restaurants, bars, etc. Acquiring competitors operating in the same marketsīrands, such as Coca-Cola, Pepsi & Heineken, spend a lot of marketing budgets to penetrate markets.Decreasing prices to attract existing or new customers.To penetrate & grow its customer base in the existing market, the firm may:
Market penetration is about selling more of the company’s existing products to existing markets. In this strategy, a firm aims to increase its market share through existing products in an established market. Of the four strategies, market penetration is the least risky, while diversification is the riskiest. Diversification: It focuses on entering a new market with the introduction of new products.Market Development: Its strategy focuses on entering a new market using existing products.Product Development: It focuses on introducing new products to an existing market.Market Penetration: It focuses on increasing sales of existing products to an existing market.The key idea is that each time you move into a new quadrant (horizontally or vertically), risk increases. This matrix allows managers to quickly summarize the available growth strategies & evaluate the associated risks.
Subsequently, the Ansoff Matrix has helped many marketers & leaders understand the risks of growing their business.
Igor Ansoff, mathematician & business manager, developed this matrix, which he published in Harvard Business Review in 1957. The matrix also reveals the risks associated with each strategy. The Ansoff Matrix, also called the Product/Market Expansion Grid, is a tool you could use to analyze & recommend strategies for growth. What amends can be made in the product portfolio to have better growth.How can we grow in the existing markets, and.The 2 questions which the Ansoff Matrix can answer are: Ansoff matrix helps a firm decide their market growth as well as product growth strategies. For any decision to be taken at corporate level, you need the right strategic tools.
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