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a product is anything that can be offered to

a market that might satisfy a want or need.


Product Class :The group of products that are
homogeneous or generally considered
substitutes for each other. The class is
considered narrow or broad depending on
how substitutable the various products are.
Product Assortment
The collection of goods or services that
a business provides to consumers. The
main characteristics of a company's product
assortment are: (1) its length or number
of products, (2) its breadth or number
of product lines, (3) its depth or number of
product varieties within a product line and (4)
its consistency


Product Attributes
Characteristics of a raw material or finished
good which make it distinct from other
products. Attributes include size, color,
functionality, components and features that
affect the product's appeal or acceptance in
the market.



IGOR ANSOFFs MATRIX
Market
Produ
ct
EXISTING NEW
EXIST
MARKET
PENETRATION
Increase sales to existing market
Penetrate existing market more
deeply
MARKET
DEVELOPMENT
Existing products sold to new
markets
NEW
NEW PRODUCT
DEVELOPMENT
New products developed for existing
markets
DIVERSIFICATION
New Products sold to new
markets
Market Penetration
Maintain increase market share in current
market with current products
Selling more of the same to the same people
In saturated market - Difficult
In stagnant market grab market share from
others intense competition


Market Penetration
Increase usage by existing customers
Encourage increase in frequency of use
Attract customers away from rivals / Gain
market share at expense of rivals
Devise and encourage new applications
Encourage non-users to buy


Use Market Penetration when -
When the market is not saturated
When there is potential of growth
When competitors share is falling
When increase in volume leads to economies
of scale
When there is scope to sell more to existing
users
Market-Penetration Strategy
Why ? To dominate market
How ? To increase usage or get new customers; reduce
price; expand distribution or increase promotional
activities
When ? When market is growing
What to look out for ? Competitive reaction; cost of
conversion
Example: Airlines used reduced fares & promotion
various family travel packages to penetrate market

A product- (new offering-) development
strategy dictates that an organization create
new offerings existing markets.
PRODUCT-MARKET STRATEGIES
Developing totally new offerings.
Adding different features, sizes, etc. to broaden the
existing line.
Enhancing the value to customers
of existing offerings.
PRODUCT-DEVELOPMENT STRATEGY
Product
Augmentation
Product
Innovation
Product
Line Extension
This strategy involves:
Product Development Strategy
New product to replace old product
New innovative products
Product improvements
Product line-extensions
New products to complement existing
Products at a different quality level from
existing product
Factors to consider when adopting this strategy:
The market size and volume needed for profitability.
The magnitude and timing of competitors responses.
The impact of the new product on the sales of
existing offerings (cannibalization).
The capacity of the organization to deliver the
offerings to the market(s).
PRODUCT-DEVELOPMENT STRATEGY
Product-Development Strategy
Why ? To satisfy buyers need
How ? New or improved product; innovate or
augment product
When ? Customer has a need or a problem
What to look out for ?
Market size/volume
competitor reaction
effect on existing products
resources to deliver new products
A market-development strategy
dictates that an organization introduce its
existing offerings to markets other than
those it is currently serving
(existing offerings new markets).
PRODUCT-MARKET STRATEGIES
Market Development Strategy
Selling the same product to different market
Entering new markets, segments with existing
products
Gaining new customers, new segments, new
markets
Requires changes in marketing strategy,
distribution, pricing policy, promotional
strategy



Use market development when
Untapped market is beckoning
The firm has excess capacity
Attractive channels to access new markets

This strategy involves:
Adjusting the marketing mix, such as:
Analyzing competitors strengths,
weaknesses, and potential for retaliation.
Modifying the basic product offering
Using different distribution outlets
Changing the sales effort or advertising
MARKET-DEVELOPMENT STRATEGY
This strategy involves (continued):
Identifying the number, motivation, and
buying patterns of new buyers.
Determining the organizations ability to
adapt to new markets to evaluate success.
MARKET-DEVELOPMENT STRATEGY
Internationally, this strategy has four forms:
Licensing
Joint Venture/
Strategic Alliance

Exporting

Direct
Investment
MARKET-DEVELOPMENT STRATEGY
Licensing

Exporting

Direct
Investment
Involves marketing the same offering in another
country through sales offices or intermediaries.
Is a contract where one firm (licensee) is given the
rights to patents, trademarks, etc. by the owner
(licensor) in turn for a royalty or fee.
Involves investment by both a foreign firm and a
local company to create a new entity in the host
country. The two forms share ownership, control,
and profits of the entity.
Involves investing in a manufacturing and/or
assembly facility in a foreign market. Is the most
risky and requires the most commitment.
Joint Venture/
Strategic Alliance
MARKET-DEVELOPMENT STRATEGY
Market-Development Strategy
Why ? To venture into new markets
How ? Sell existing products in new markets;
modify product; use different distribution; use different
advertising/sales strategy
When ? Present market is saturated
What to look out for ? Competitive reaction;
understand new buyers; adaptability
Diversification
New products sold to new markets
New products sold to new customers
Select based on growth prospects which the
two new variables offer that the present
product-market does not
Diversification Types
Related
Beyond present product
market, but within
present industry
Synergistic
diversification
Lesser risk

Unrelated
Entirely new product
and market
Conglomerate
diversification

Market Penetration
Advertise - to encourage more people within
your existing market to choose your product,
or to use more of it
Introduce a loyalty scheme
Launch a price or other special offer
promotions
Increase your sales force activities
Buy a competitor company (particularly in
mature markets)

Product Development
Extend your product by producing different
variants, or packaging existing products it in
new ways
Develop related products or services
In a service industry, shorten your time to
market, or improve customer service or
quality

Market Development
Target different geographical markets at home
or abroad
Use different sales channels, such as online or
direct sales if you are currently selling through
the trade
Target different groups of people, perhaps
with different age, gender or demographic
profiles from your normal customers.