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Ansoff's matrix:
Market Penetration
Here we market our existing
products to our existing customers. This means increasing our revenue by, for
example, promoting the product, repositioning the brand, and so on. However, the
product is not altered and we do not seek any new customers.
Market Development
Here we market our existing
product range in a new market. This means that the product remains the same, but
it is marketed to a new audience. Exporting the product, or marketing it in a
new region, are examples of market development.
Product Development
This is a new product to be
marketed to our existing customers. Here we develop and innovate new product
offerings to replace existing ones. Such products are then marketed to our
existing customers. This often happens with the auto markets where existing
models are updated or replaced and then marketed to existing customers.
Diversification
This is where we market
completely new products to new customers. There are two types of
diversification, namely related and unrelated diversification. Related
diversification means that we remain in a market or industry with which we are
familiar. For example, a soup manufacturer diversifies into cake manufacture
(i.e. the food industry). Unrelated diversification is where we have no previous
industry nor market experience. For example a soup manufacturer invests in the
rail business.
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