The product market expansion grid was specified by the Ansoff’s matrix. The product market expansion grid is used for planning by a company when the company is looking to increase the sale of its products either by expanding product range or entering new markets. Thus, there are various strategies that the company can develop when it compares the product with the current market.
The product market expansion grid considers two main factors. The product and the market. The product can either be a current product or a new product. And the market can either be a current market or a new market. Thus, a grid is made, keeping in mind the two forms of products and the two forms of markets. This grid is the product market expansion grid. With the help of the grid, the proper market expansion strategy is decided. There are 4 main strategies of the product market expansion grid. These are mentioned below.
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Market penetration strategy
Market penetration strategy is decided when the product is a current product in an existing market. It falls in quadrant 1. Thus, in such a case, the customers are aware about the product and due to one reason or another are not using the product. There are three main tactics which a company can implement to increase market penetration.
How can companies strategically expand their product markets?
For those looking to implement the Ansoff’s matrix successfully, incorporating recent industry insights offers significant advantages. According to a 2023 survey by Deloitte, 57% of companies that integrated market development strategies observed a notable increase in international sales, highlighting the potential of reaching untapped markets. Utilizing data-driven approaches to identify and penetrate these new territories can further optimize the success of market development efforts.
Another practical tip for companies aiming for product development is to leverage customer feedback to ideate new offerings. A study published by Gartner in 2022 found that businesses that incorporated customer feedback into the initial stages of product development saw a 20% higher success rate in product launches compared to those that did not. This feedback loop not only ensures that the new product is tailored to customer needs but also builds loyalty and trust with the consumers.
Market development strategy
The market development strategy is used when the product is an existing product but the market is new. This strategy falls in quadrant 2 of the grid. A company might decide to increase its territorial reach and therefore enter a new market. The new market may have tough competitors, or it may happen that the new company may be received very positively. In either of the cases, there are three main tactics which the company can use for market development.
Product development strategy
Product development is used when there is a new product which has to be introduced in an existing market. It falls in quadrant 3 of the matrix. This may be done because the companies products are not selling anymore or that the company has identified new segments which it had missed before and wants to introduce new product to increase product sales. There are majorly three tactics which the company can use for Product development.
Diversification strategy
Diversification strategy is used when a company enters new markets with new products. In such a scenario, the demands of the new market might be different from the current markets where the company exists. Thus, the company has to bring new products in new markets and hence the complication rises. In such a case, there are 3 different tactics which a company has to use to establish a diversification strategy.
Thus, there are many tactics and 4 different strategies for market expansion. In today’s world, the most commonly used strategy is Market penetration, because the market is slowly becoming a crowded place with products being introduced daily in existing segments. However, for market leadership, companies like apple and Samsung have demonstrated that either market development or product development is needed if you want to permanently get ahead of your competition.
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How can expand a star brand waltion a new product then it has to be hold,build and diversify .
how can we expand our brand ,we are funeral scheme bt want to expand to ,financial loans ,and advertising company
I think rolling everything into one will be a bad idea. Instead, building a separate brand for each will be better in your case.
thank you, this is very helpful
I do not know if there is recorded notes on developing a product profile per se of a product. Making the product with dynamically added features to make the actual product look larger as a product which has more elements for utility for the customer than the single distinct core feature that he looks for. When products are enlarged in the area of actual product with more features that address beyond the main utility – a few more, resulting in larger utility value and delivers an experience.
For instance – a caravan – delivers:
Travel /transport (movement of people and material)
a dwelling for people to stay
A small pantry
etc.
here the product – caravan delivers – Transport, dwelling, kitchen etc.