Gurus On Marketing

Existing product/new market
Here the company has to market its existing product in a new market.
This is the strategy of market development. The strategy also involves
promoting new uses for an existing product and market segments.
Market development can be achieved through identifying potential
user groups in the current market areas or seeking additional distribution
channels in the present geographical locations.
Generally speaking, market development strategy is less risky than
product development because the company can rely on the current
activity level of the existing product in the market whilst it pursues
new market opportunities. McDonalds, for example, a US fast food
chain has adopted a market development strategy through franchising
in many parts of the world.
New product/new market
In this situation the company has to pursue diversification strategy.
Diversification can either be horizontal, vertical or conglomerate.
Horizontal diversification refers to the development of activities which
are complementary to the company’s existing activities. Nestle’s takeover
of Rowntree Mackintosh is an example of horizontal diversification.
Vertical diversification refers to the development of activities which
involve the stages in the company’s value chain. Downward integration,
for example, would involve the company’s activity related to the preceding
stage of its production process whereas upward integration would
involve its succeeding stage in the production process.
Conglomerate diversification happens when a company seeks new
businesses that have no relationship to its current technology, products
or markets.
Ansoff’s matrix enables businesses to look at their products and
markets and to think of appropriate strategies for their business.
TEN GURUS AND STRATEGIC ANALYTICAL TOOLS 135