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Ansoff business marketing matrix
06 April 2009
As a business coach and executive mentor to SME business owners and directors in the Midlands and London, one of the main areas that we discuss is business marketing and how to go about product development. Ansoff's matrix has been around for many years and is excellent for helping businesses with the marketing mix. I have extended his model to include the standard 4P’s and the additional 5P’s linked to internet marketing. Within marketing this area is crucial due to faster and faster global change, and the concern is how to structure their marketing plans.
After browsing this list you will:
- have a very good understanding of how to structure your Product Development plans
- recognise exactly where some of your products and services fit
- reacquaint yourself with the 4P’s – Product, Price, Promotion and Place
- be introduced to the 5p’s of the Internet – Push/Pull, Payment, Personalisation, Precision and Privacy
- have a matrix for requesting the cost and time scales for the different areas
Business Marketing with Ansoff’s Matrix
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New
Market
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Market
Development
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Market
Diversification
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Current
Market
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Market
Penetration
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Product
Development
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Current
Product
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New
Product
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Marketing for any product or service for any company will denote the success or failure of the business. The challenge comes with what to do with existing products in existing markets – invest in the marketing mix for the existing product/market or develop the market/product or diversify the product/market.
This conundrum was helped by Ansoff, who in the late 50’s created his Market/Product development model to help people and companies who wanted to discover what they had to do with existing products or services serving existing markets. This application matrix gives people a shopping list to tick off as they find their way through the maze of options.
When Ansoff created this model, his idea was to help companies but it can be used by individuals deciding on career or job moves as well. When starting out any person, be they an individual or operating as a sole trader or limited company they will automatically find themselves in Box 1 – Current product/current Market.
The idea of this matrix is that when you decide to investigate a change in marketing strategy for whatever reason, you have a tick box to ensure that you visit each area of the marketing mix. This means that they will need to investigate the cost and time scales involved with each of the standard P’s – see the explanation below the matrix for the additional 5 P’s that refer to Internet Marketing (Push/Pull, Personalisation, Payment, Precison and Privacy) that go across the matrix on row 1.
For start-ups this is extremely useful information to decide which market to go for but for companies with existing products in existing markets this could bring them to row 2, Market development. As one goes across the matrix the clearer will appear the cost and time scale picture for each Marketing action.
When looking at each square it is important to work through the cost and the timescales involved with any development or diversification. As there are so many areas to be investigated, this matrix serves as a reminder as to where you have got to. The resultant costs must be added up the timescales transferred to a GANT or PERT project chart. For example the more the individual develops their career or the company/market develops and changes, the more competition that appears – see Porters 5 Force model for help with Competition – the more it will be necessary to decide on a strategy that keeps sales on track and margins profitable.
Cost and Time Scales need to be filled in for each box below:
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Market
Penetration
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Market
Development
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Product
Development
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Product
Diversification
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| Product |
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| Price |
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Promotion
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| Place |
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| Push/Pull |
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| Personalisation |
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| Precision |
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| Privacy |
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©William Barron
Coaching Insight