You know what your business objectives are. You now need to determine how you are going to achieve them. Let me acquaint you with Ansoff and his matrix, which neatly lays out four different marketing strategies and I’ll take you through how to use them to make practical marketing decisions.
Ansoff’s four marketing strategies:
Products and Services
1. Market penetration
Sell more of your existing products or services to your existing market place.
Unless your market is saturated already with providers of your particular service, this is the lowest risk strategy. You already know your market place. You know what they want, what they need, how to meet those needs with your products. Your product is developed, it works well, your market place know it and like it. I tend to advise clients who are cautious, unsure or short of time and money to make this a strategy that they pursue.
2. Market development
Take your existing products and sell them to a new market.
If you have a robust product or service which you think will translate to another market place, this is a great strategy to follow. It is also good because you are not putting all your eggs in one market place basket. Imagine you are a business that just sold to the Russian market; the crash of the rouble and EU sanctions will have killed your business. Meeting the needs of different markets can help spread your business risk.
However, before you approach a new market the three key words are: research, research and research. Not every market will appreciate your widget in exactly the same way as your current market.
3. Product development
Develop new products or services and sell them to your current market place.
You know your clients in your current market place really well. In fact, so well, you have identified another want or need of theirs which isn’t being met. So, you decide to develop a new product to meet that need.
This strategy, like Market Development, is a good one for spreading your business risk. If your A Product is no longer needed, you have B product still going strong.
Before you embark on this strategy though, make sure you are developing a product that does meet the needs of your market place and which won’t damage or negatively impact your current product or service’s reputation.
All change! Develop a completely new product or service and take it to a completely new and unknown market place for your business.
This strategy is the most risky as you are operating in an unknown market and developing a new product or service. The potential to get it wrong is high, so market research is key and strong product development is vital.
However, this is a great strategy if you want to have very separate and distinct arms of your business. Take Virgin Cola; when that failed, did Virgin Atlantic suddenly become less needed or lose its reputation? No, because while the two businesses have the same owner, they are so different, one could fail without heavily impacting the other.
Most businesses will choose a mixture of the strategies eg 25% of business this year will be based on a Product Development strategy, 50% on Market Penetration etc. so that they are spreading their business risk.
By Kara Stanford, Strategic Marketing Consultant, KMS Marketing, Hampshire.
If you would like to set your marketing strategy, then contact me.