Ansoff’s Product Market Growth Matrix

In today’s global marketing village, every business entities are facing various problems regarding the framing of an effective strategy for the growth of product and market. As the pace of competition is increasing day by day, your market strategy practically determines your future on the market.

In order to lead the market through product and market shares, Ansoff’s Product Market Growth Matrix provides the framework for the product and market growth strategy.

With the use of this matrix, a business can get fair idea about how its growth depends upon the markets in new or existing products in both new and existing markets. Companies should always be looking towards the future. The product/ market growth matrix is a portfolio-planning tool for identifying company growth opportunities.

Lets’s discuss some of the  growth strategies

Market Penetration:

Market penetration is a business growth strategy where you can sale your existing product at the existing market. An entity can penetrates its market through modification or improving. You should consider the taste of customers and accordingly improve product which ultimately helps to increase market share. You can penetrate your marking simply by making more sales to present customers without changing products in any major way. For this, you may require an  aggressive promotional campaign, supported by a pricing  strategy designed to make the market unattractive for competitors. Penetration is  also done by  effort on increasing usage by existing customers.

Market Development:

Simply, market development is selling products into new market where you have no presence before. As you know market development is that for which every business organisation are playing in the market to lead among rivals. Market development is a growth strategy where you are trying to enter into new market. For then, you need to identify and develop new markets, product dimensions identifying and developing new markets for current company products.

Product Development:

If your business organisation has a good status over the market, then you can expand or develop your product line. This is because, your goodwill will help encash your new product easily in the market. When a company has confidence, it can introduce any product which can fulfill the customers demands, it can launch a new product in the existing market where it operates. It is a strategy for company growth by offering modified or new products to current markets. This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets.

Diversification:

When you  market your new products in a new market, it is a growth strategy of diversification. It is a strategy by starting up or acquiring businesses outside the your current products and markets. This strategy is risky because it does not rely on either the company’s successful product or its position in established markets. Before to take this decision you have to fully prepared as you are moving into markets and dealing with the products in which it has little or no experience.

As market conditions change overtime, a company may shift product-market growth strategies. For example,when its present market is fully saturated a company may have no choice other than to pursue new market. Further, if your entity has a sound position in the market and market environment is favouring you, you can opt any of the above strategy as per your business needs.

If you have any queries, please feel free to comment

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