Abdul Rehman Khan.

Sap ID 70126933

Principles of Marketing

Assignment-01

Explain Ansoff’s product/Market Expansion Grid? Elaborate why do

companies use this model? Discuss the scenarios for each strategy in which it
is suitable to pursue a particular strategy.

Ansoff’s product/market expansion grid is a strategic tool that assists businesses in identifying
potential opportunities for growth. It was created in the 1950s by Igor Ansoff, a Russian-
American mathematician and business theorist. Market penetration, market development,
product development, and diversification are the four growth strategies represented in the matrix.

1. Marketing Penetration

This strategy entails increasing existing product sales to the existing market. This is
accomplished through a variety of means, including increased advertising and promotion, lower
prices, and improved distribution channels. This strategy is appropriate when a company has a
strong market presence but still has room to grow. For example, a soft drink company may offer
promotional deals to entice customers to purchase more of their product.

2. Marketing Development

This strategy entails broadening the target market for an already existing product. This can be
accomplished by expanding the product’s geographic reach or by targeting a new customer
segment. When a company’s current market is saturated or when the company wants to diversify
its customer base, this strategy is appropriate. A company that sells clothing for young adults, for
example, may begin selling clothing for children.

3. Product Development

This strategy requires introducing new products into an already existing market. This can be
accomplished by modifying existing products or developing entirely new ones. This strategy is
appropriate when a company has a large customer base and wishes to expand its product line in
order to increase sales. A company that sells sports shoes, for example, might start selling sports
bags and other accessories.

4. Diversification

This strategy requires launching new products into new markets. This can be accomplished by
either starting a new business or acquiring an existing one. When a company wants to reduce its
reliance on existing products or markets, this strategy is appropriate. A company that sells
electronics, for example, might start a new business that sells clothing.

This model is used by businesses to identify potential growth opportunities and to develop a
growth strategy that aligns with their objectives. Companies can use this tool to evaluate various
options and choose the best strategy for their specific situation. This model is particularly useful
for businesses looking to expand their operations or enter new markets. It assists them in making
informed decisions and mitigating risks by assessing the potential impact of each strategy.

Draw and explain the marketing process that aims at creating long term
profitable customer relationship.

The marketing process that creates”long-term profitable customer relationships is known as

Relationship Marketing. Relationship Marketing is a strategy that focuses on building long-term
relationships with customers rather than just selling products or services.
The basic premise of relationship marketing is that retaining existing customers is more cost-
effective than acquiring new ones. As a result, the emphasis is on cultivating a loyal customer
base through ongoing engagement and communication. This can include personalised email
campaigns, loyalty programmes, social media engagement, and other forms of direct
communication.

Relationship marketing requires understanding of the customer’s wants, preferences, and

behaviours. Marketers can tailor their approach to each individual by collecting and analysing
customer data, resulting in a more personalised and relevant experience. This approach can lead
to increased customer satisfaction, brand loyalty, and, ultimately, increased revenue and
profitability for the company.
In summary, relationship marketing is a customer-centric approach that aims to build long-term
relationships with customers by providing personalized experiences and ongoing engagement. It
is a strategy that recognizes the value of customer retention and seeks to create a loyal customer
base that will continue to support the business over time.