Marketing Organizational Management

MA 61200
Professor: Dr. Lascelle A. Sweetland
Student: Jorge Yeshayahu Gonzales-Lara

Concentric Markets

Miami, January – 2019

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 Concentric Markets

Concentric Market is a simulation application that helps to design the right go-to-
market strategy, speeds up the analytics. It unifies data, processes and it improves
the forecasts. Concentric Market serves as a centralized platform to integrate the
finance, operations and marketing analyses.

 Connect company information

 others Collaborate with

Concentric Market simulates consumer markets with accuracy that matches or

exceeds the highest statistical standards of any existing marketing analytic tool,
while providing insights that go further. They explore strategies to develop and
launch new products and evaluate the risk of new competitive entrants. They
forecast consideration, perceptions, word-of-mouth, sales, and return on
investment for each of the brands competing in the market and for each of their
target consumer segments. Ultimately, Concentric simulations allow users to build
better marketing strategies faster because they recreate market dynamics,
validate to multiple metrics, and learn with artificial intelligence.

Concentric Market are principles from marketing analytics, behavioral

economics, network science, and agent-based modeling. Agent-based
modeling is the core engine in Concentric Market and understanding its
components reveals how simulation works. The components are: 1) Variables and
Rules 2) Initial Conditions 3) Calibration Algorithms 4) What-if Scenario Analysis

Concentric Market provides a system that combines social science and

marketing science to solve specific marketing challenges and enhance
executive processes. Simulation reinvigorates marketing innovation by
empowering marketers to evaluate and optimize “outside the box” programs that

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they may have been uncomfortable executing in the real world by safely
evaluating them in a virtual environment. What makes Simulation unique for
solving challenges is that it can do all the following simultaneously:  Business
Strategy Comparison  Campaign/Channel Attribution  Media Optimization 
Creative Content Optimization  CRM Program Optimization  Corporate Social
Responsibility  In-Store Strategy  Pricing Analytics  Product Development 
Product Launch Support  Trade-dollar Assessments  Targeted Media Buying

Additional benefits of a simulation approach stem from the implementation of a

unifying process to:  Improve resource allocation  Make real-time/near-time
decisions  Identify new markets  Communicate insights  Facilitate change 
Encourage collaboration  Enhance transparency  Accelerate the development
of new products/services With a more complete answer, at lower costs, and at
faster speeds, simulations are getting broad adoption and are set to transform
marketing strategy.

Diversification strategies are used to extend the company’s product lines and
operate in several different markets. The general strategies include concentric,
horizontal and conglomerate diversification.

Each strategy focuses on a specific method of diversification. The concentric

strategy is used when a firm wants to increase its products portfolio to include like
products produced within the same company, the horizontal strategy is used
when the company wants to produce new products in a similar market, and the
conglomerate diversification strategy is used when a company starts operating
in two or more unrelated industries.

Diversification strategies help to increase flexibility and maintain profit during

sluggish economic periods. A concentric diversification strategy lets a firm to add
similar products to an already established business. For example, when a
computer company producing personal computers using towers starts to

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 produce laptops, it uses concentric strategies. The technical knowledge for new
venture comes from its current field of skilled employees. Concentric
diversification strategies are rampant in the food production industry. For
example, a ketchup manufacturer starts producing salsa, using its current
production facilities.

Forecast more accurately.

Most sales forecasts are manually created and have a high level of
uncertainty. Concentric Market forecasts human behavior to deliver a
comprehensive and accurate demand forecast.

 Reduce uncertainty
 Respond to market changes in real time

Owning a small business involves multiple challenges, including the fact that your
company won’t thrive, if you don’t find ways to expand and grow. One of the
most effective ways a business can grow and expand is by implementing
concentric diversification, which focuses on adding products and services that
are related to the main product or service that you offer. One example would be
a pizza restaurant that adds calzones and pasta to its menu.

Concentric diversification allows businesses to achieve large goals with smaller

working parts and less of a financial cost. A business owner that employs a
concentric diversification strategy seeks to broaden his distribution network
without going too far afield in what he offers his target audience. This concentric
strategy can provide several key benefits to a growing business, including the
ability to reach a wider audience.

One of the important benefits of concentric integration is that it allows you to

utilize your existing competencies and abilities to launch your new product or
service. Rather than having to start from scratch, the framework you’ve already
established in your business can be directed toward the new product or service.
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Using the same example of the pizza restaurant, it wouldn’t take much of an
investment in raw materials for that restaurant owner to begin serving pasta and
calzones, since the basic ingredients for making pizza are like those for making
calzones and pasta dishes. When you diversify with a concentric strategy, you
can rely on your experience selling your main product or service to help you
develop and market the new product or service. One thing to consider, however,
is that the new product or service must have the same quality as your existing
product or service. Diversification will not prove successful if your new product or
service doesn’t fulfill your customers’ wants and needs.

Concentric integration also helps to achieve synergy, which is the ability of smaller
departments or division to achieve larger goals than would be possible as
separate entities. A concentric strategy creates a strategic fit as a result of
developing complementary products or services. In the example of the pizza
restaurant, the owner could decide that her concentric strategy involves buying
other local pizza restaurants as a means of increasing product distribution and
expanding into new market areas. After acquiring those new restaurants, the
owner could employ a differentiation strategy in which some of the restaurants
offer entertainment such as video games and live music. This strategy can attract
new customers while making existing customers more likely to remain enthusiastic
about frequenting these restaurants. Concentric Market serves as a centralized
platform to integrate the finance, operations and marketing analyses.

Bibliography and References

1. Strategic Management – Diversification.

https://www.tutorialspoint.com/strategic_management/diversification_str
ategies.htm
2. Strategic Marketing Simulations A New Approach to Marketing Strategy

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https://concentricmarket.com/wp-content/uploads/2017/01/The-Secret-to-
Marketing-Simulations-by-Concentric.pdf

3. Sampon, Quian. What Are the Benefits of Concentric Diversification?

October 29, 2018.
https://smallbusiness.chron.com/benefits-concentric-diversification-36784.html.

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