UITS

UNIVERSITY OF INFORMATION TECNOLOGY & SCIENCES

Assignment
Course Title : Marketing Management.

Course Code : MBA - 508.

Submitted To : Professor Dr. Mohammed Solaiman,

Vice Chancellor,
University of Information Technology and Sciences.

Submitted BY : Ikramul Haque Nipu. (ID: 1914402010)

Department : Business Studies.

Submission Date : 11-10-2019

 A. What is the Product/Market Expansion Grid?
The Product Market Expansion Grid, also called the Ansoff Matrix, is a tool used to develop
business growth strategies by examining the relationship between new and existing products, new
and existing markets, and the risk associated with each possible relationship. The matrix aids
growth plans through the introduction of existing or new products, in existing or new markets.

B. Show Product/Market Expansion Grid by a figure.

C. Describe Product/Market Expansion Grid in

detail.
The Product Market Expansion Grid offers four main suggested strategies: Market
Penetration, Market Development, Product Development, and Diversification.

Market Penetration Strategy: Existing Products + Existing Markets = Low

Risk

The Market Penetration Strategy creates growth by focusing on introducing current products to
existing markets. In such instances, customers may be aware of a product but for some reason are
not purchasing it. This strategy is typically used to achieve one or more of the following objectives.

 Increasing or growing the market share of current products with pricing strategies,
promotions, advertising and an increase in sales efforts
  Securing dominance of growth markets by identifying which markets offer the best
prospects for existing products
 Driving competitors out of a mature market with aggressive pricing and promotional
campaigns
 Increasing usage of a product by existing customers through special offers and loyalty
schemes

Market Development Strategy: Existing Products + New Markets = Some Risk

The Market Development Strategy creates growth through the introduction of current products to
new markets. This strategy is used when a company has identified markets that were previously
unidentified or when it wants to expand its market reach. Here too, there are a number of tactics
to enter and develop a new market for existing products.

 Focus can be turned to new and untapped geographical areas

 New pricing procedures can be used to attract new target audiences
 New distribution channels can be created to offer products in new ways and to new
customers

Product Development Strategy: New Products + Existing Markets = Some Risk

The Product Development Strategy is a growth tactic used when a company introduces new
products into existing markets. A company would typically use this approach when current
products are no longer selling. New competencies and skills may be required by the company to
successfully develop products.

This strategy is likely to be more expensive than the market focused tactics and requires more
time. Emphasis needs to be placed on a detailed analysis of customer needs, research and
development, and early introduction to ensure products are first to market. The company can use
the following methods to stimulate growth.

 Adding new features to existing products

 Innovative and new technologies can be added to products or used to improve products

Diversification Strategy: New Products + New Markets = High Risk

The Diversification Strategy is used when new products are introduced to new
markets. Diversification is the riskiest of all the approaches. This strategy requires the highest
amount of investment of both time and resources.

While this approach is likely to be the costliest, diversification offers a company security and an
advantage should it suffer in one sector of the business because it can then rely on another. Ansoff
reinforces that this strategy will require the company to acquire new skills, techniques and possibly
facilities. Good feasibility studies and research are key to ensure a winning approach.
There are three diversification strategies that an organization can consider: concentric
diversification, horizontal diversification, and conglomerate diversification.

 Concentric Diversification – leveraging a company’s core technical know-how to diversify

its current products into new markets
 Horizontal Diversification – the introduction of products that are unrelated to a company’s
core products to existing markets
 Conglomerate Diversification – the purchasing of another company in order to diversify

To better understand these three diversification strategies, consider the following example:

Through concentric diversification a company that manufactures glass jars for the food industry
enters the construction market through the manufacturing of glass bricks.

Through horizontal diversification, the glass manufacturer sees the opportunity to offer
specialized cement products with which to build glass brick walls.

And through conglomerate diversification, the glass manufacturing company will acquire the
manufacturer of colored dies with which to color the glass it makes.