PRODUCT/ MARKET GROWTH MATRIX

1. A Wholesaler plans to double their retail sales team and sell more to their existing
customers.
Market Penetration:
A wholesaler is planning to achieve growth with existing products in the existing market
segments by selling more of it to them.
2. A shoe manufacturer is considering developing other products that may be of
interest to their existing retail customers (such as socks, belts, shoe polish, hats, caps
etc).
Product Development:
A shoe manufacturer is going for Product development as he is developing new products
to its existing market segments in order to achieve growth.

3. A specialist health food firm (that now only sells directly to end-consumers) is
looking to introduce a new product range in order to gain access to chemist shops.
Product Development:
Health food firm is going for Product Development by creating new products for the
existing market segment by expanding customer base from end-consumers to chemist
shops.
4. Kmart stores are planning to use more frequent discounts to attract more new
customers and to sell more products to their existing customers.
Market Penetration:
Kmart is penetrating the market by selling more but products through discount offers to
the existing market and finding new customers in the existing market.
5. McDonalds are planning to further broaden their product range to appeal to a
wider market.
Market Penetration:
McDonalds is planning to add to its existing product range in order to increase its
existing market share.

6. A successful accounting firm is just about to open their first international office.
Market Development:
Accounting firm is opening its office in the other country which is a new market for its
accounting services.
7. A local plumber is thinking about buying a hardware store that is currently for sale.
Product Development:
Plumber is buying a hardware store which is totally a new business to sell hardware
components for the existing market as compared to its profession.
8. A large real-estate chain has just set-up an internet site that helps people, who are
buying / selling property, to find qualified service providers in their area (such as,
lawyers, accountants, movers, cleaners and so on).
Product Development:
Real estate chain is introducing new products (services) in the form of lawyers,
accountants, movers, cleaners etc for its existing customers as well as new customers of
real-estate chain.
9. A small winery is considering opening up a small restaurant on their property.
Product Development:
Winery is introducing a new product food range for its existing customers.
10. A local Chinese restaurant has expanded its menu to also include Vietnamese and
Thai food.
Product Development:
Chinese restaurant is introducing new different kinds of foods for increasing new
customers from the same market.
11. A major law firm has doubled the number of seminars and conferences that it holds
each year, in an attempt to win more business.
Market Penetration:
A law firm is trying to sell more of its services by taking strategies to attract new
customers in the same market or penetrating the market.
12. A university / college have started running correspondence courses for the first time.

Product Development:
College is introducing new courses for the first time or new products in the existing
markets or for students.
Question # 2:
Market Penetration (mostly focused):
It is the safest of the four options. In this strategy, you focus on the expansion of the sales
of the existing product in the existing. You are completely aware of all the functions and
specifications of the product that how it works together with the idea of the market in
terms of its environment and all the external and internal factors that affect it. There are
very little surprises for you, so the risk is minimal. That is the reason mostly firms go for
this strategy in order to expand and increase its sales (Watts, Cope and Hulme, 1998).
But when there comes the saturation point in this market and no more increase in sales
with up gradation in the business cycle, the firm has to go to more risky options like
product development / introducing new products or market development to go to another
market for its products.
Diversification (least adopted):
It is the most risky of the four options. In this strategy, the products to be introduced are
totally unproven, new and being launched for the first time and the market is totally new
or not understandable fully yet. There is no idea of all the internal and external factors as
how they would affect and the environment is totally new, together with this whether
people would like the product is also very risky. A very high risk is involved due to which
only those businesses that have enough resources and capabilities that can well address
the risk go for this option. All such businesses have enjoyed the fruits of all the strategies
with existing products in new and existing markets now want to move into the other
markets with new products in the form of diversification (Reed and Luffman, 1986).
Question # 3:
Ansoff Matrix:
All the businesses around the world want to grow and expand in order to have higher
sales. Growing means whether to focus on its existing markets with existing products or
new markets with new or existing products. Markets have changed, not rigid, prospects
changing and speeds faster than any company can follow. It is a part of looking at
innovation. Digital era is emerging. The digital techniques are making companies think
and avail new opportunities. Ansoff Matrix is solution to all this. Ansoff Matrix is
essential for strategic marketing planning here it helps companies to look for the
opportunities to grow revenue for a business through developing new products and

services or tapping into new markets (Hussain etal, 2013). It is sometimes known as
Product-Market Matrix instead of Ansoff Matrix. It is one of the widely used marketing
models. It is used to evaluate opportunities for companies to increase sales through
showing alternative combinations for new markets i.e. customer segments and
geographical locations against products and services offering four strategies.

Market Penetration: The firm seeks to achieve growth within existing products
in their current market segments, aiming to increase its market share.

Product Development: The firms develop new products targeted to its existing
market segments.

Market Development: The firms seek growth by targeting its existing products
to ne market segments.

Diversification: The firm grows by diversifying into new businesses by

developing new products for new markets.
References:

Watts, G., Cope, J. and Hulme, M., 1998. Ansoff Matrix, pain and gain: Growth strategies
and adaptive learning among small food producers. International Journal of
Entrepreneurial Behavior & Research, 4(2), pp.101-111.
Hussain, S., Khattak, J., Rizwan, A. and Latif, M.A., 2013. ANSOFF Matrix,
Environment, and Growth-An Interactive Triangle. Management and Administrative
Sciences Review, 2(2), pp.196-206.
Reed, R. and Luffman, G.A., 1986. Diversification: The growing confusion. Strategic
Management Journal, 7(1), pp.29-35.