Gurus On Marketing

The matrix offers strategic choices facing managers in order to achieve
their objectives. The matrix involves two dimensions, namely product
and market. There are four permutations. These are:
1 Existing product/existing market.
2 New product/existing market.
3 Existing product/new market.
4 New product/new market.
In each of these situations there are strategic choices presented on
which to take action.
Existing product/existing market: In this situation a company has
an option of either doing nothing, which means continuing its existing
strategy or to choose to consolidate its current market position
by focusing attention and initiating marketing activities in the area
where it has competitive advantage or to choose to penetrate the
market (market penetration). Revenues could be increased by promoting
the product or the brand. In static or declining markets, a firm
will face intense competition to gain market share. Market penetration
would normally involve expenditure in support of price discounts,
distribution incentives etc.
New product/existing market
In this situation, the company has to invest in introducing new products
to its existing market. The focus is to build on the existing
knowledge to explore new opportunities identified by the company.
Over time all products pass through a product life cycle. As existing
products mature, new developments are often introduced to extend
the product life cycle. An example of such a strategy would be Unilever’s
introduction of the three-in-one dishwasher tablets which replaced
the need for separate salt, detergent and rinse agents.
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GURUS ON MARKETING