8.1 Reasons for choosing different strategies

• Market Penetration

  • growth in existing market
  • scope to encourage greater frequency to use with existing customers
  • some consumers may be encouraged to put an existing product to different uses
  • by modifying the marketing mix there is a potential to draw customers away from competitors
• Product Development

  • scope to adapt the quality of a product to appeal to different market segments
  • an existing product is becoming obsolete or out of date and needs to be replaced
  • an existing product has created a need or desire for complimentary products
  • R&D within the business has led to the creation of a new product
  • market researchers reveal the potential for a new product that would serve previously unrecognised customer needs
• Market Development

  • there are market segments that do not currently buy an existing product in significant numbers
  • there is scope to enter new markets such as overseas countries
  • new markets/segments can be reached easily using the businesses existing channels
  • business has spare capacity
  • businesses greatest strength is the reputation of its existing products
• Diversification

  • existing products and markets are in decline and likely to remain so
  • existing markets are saturated and therefore no scope for expansion
  • if senior managers want to spread risk and give the business a new challenge