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• Ansoffs matrix 


  Marketing planning model which helps a business determine its products and market strategy
• What does market penetration aim to do

  It aims to increase market share by selling existing products to target customers and getting existing customers to buy more
• Examples of market penetration

  • Rapid organic growth in the UK targeting the same customer base with new stores
  • Effective use of e-commerce to encourage existing customers to buy more pizza!
• Examples of market development

  • Starbucks expansion into China is a classic example of a successful market development strategy
  • Tesco’s market development strategy to enter the US grocery supermarket sector was a disaster for shareholders
• Examples of product development strategies

  • Brand extensions are common examples of product development strategies
• Examples of failed diversification

  • Great example of a failed takeover and diversification: bought by ITV for £175m; sold fold £25m and then closed
  • Retailer HMV diversified into the live entertainment market with the £40m purchase of several live music venues. Exited the market soon after
• Cost leadership benefits

  Higher profit margins / charge same price but spend less

  
  
• Cost focus

  Seeks lower cost advantage

  Product will be basic/similar to higher priced product

  
  
• Differentiation focus

  Focus on classic niche marketing strategy

  Aims to differentiate within one/ small number of target market segments
• Differentiation leadership

  Targets larger markets & aims to achieve competitive advantage
• Ways to achieve differentiated leadership

  Superior product quality

  Strong branding

  Wide distribution to all channels

  Consistent promotion
• Factors influencing choice of strategic position

  Position of direct/indirect competitors

  Skills within business

  Market share desire of business