The Ansoff matrix is a strategic planning tool that provides a framework to help executives, senior managers, and marketers devise strategies for future business growth. It is named after Russian American Igor Ansoff , an applied mathematician and business manager, who created the concept.
54-451: Ansoff, in his 1957 paper, "Strategies for Diversification", provided a definition for product-market strategy as "a joint statement of a product line and the corresponding set of missions which the products are designed to fulfill". He describes four growth alternatives for growing an organization in existing or new markets, with existing or new products. Each alternative poses differing levels of risk for an organization. Market penetration
108-618: A Bachelor of Business Administration (BBA), Master of Business Administration (MBA), Master of Arts (M.A.) or Master of Science (M.S.) in Marketing, and Master of Arts (M.A.) or Master of Science (M.S.) in Industrial-Organizational (I/O) Psychology. A focus in advertising, public relations, communications, graphic design, and other related fields is helpful. Real-world work experience in related disciplines will help improve qualifications. Effectively communicating in
162-619: A business or organization. Any company that sells products or services to other businesses or organizations (vs. consumers) typically uses B2B marketing strategies. The 7 P's of B2B marketing are: product, price, place, promotion, people, process, and physical evidence. Some of the trends in B2B marketing include content such as podcasts, videos, and social media marketing campaigns. Examples of products sold through B2B marketing include: The four major categories of B2B product purchasers are: Business-to-consumer marketing, or B2C marketing, refers to
216-498: A competitive advantage". For instance, the Chartered Institute of Marketing defines marketing from a customer-centric perspective, focusing on "the management process responsible for identifying, anticipating and satisfying customer requirements profitably". In the past, marketing practice tended to be seen as a creative industry, which included advertising , distribution and selling , and even today many parts of
270-565: A completely unknown business. Product marketing Product marketing is a sub-field of marketing that is responsible for crafting the messaging, go-to-market flow, and promotion of a product. Product marketing managers can also be involved in defining and sizing target markets. They collaborate with other stakeholders including business development , sales , and technical functions such as product management and engineering. Other critical responsibilities include positioning and sales enablement. Product marketing deals with marketing
324-488: A concrete process that can be followed to create a marketing plan . The "marketing concept" proposes that to complete its organizational objectives, an organization should anticipate the needs and wants of potential consumers and satisfy them more effectively than its competitors. This concept originated from Adam Smith 's book The Wealth of Nations but would not become widely used until nearly 200 years later. Marketing and Marketing Concepts are directly related. Given
378-408: A managerial approach that covered analysis , consumer behavior , market research , market segmentation , and planning . Phillip Kotler , popularised this approach and helped spread the 4 Ps model. McCarthy's 4 Ps have been widely adopted by both marketing academics and practitioners. One of the limitations of the 4Ps approach is its emphasis on an inside-out view. An inside-out approach
432-412: A market. In addition, a great deal of advertising and promotion is designed to show how a given product's benefits meet the customer's needs, wants or expectations in a unique way. The two major segments of marketing are business-to-business (B2B) marketing and business-to-consumer (B2C) marketing. B2B (business-to-business) marketing refers to any marketing strategy or content that is geared towards
486-657: A model-building perspective, the 4 Ps has attracted a number of criticisms. Well-designed models should exhibit clearly defined categories that are mutually exclusive, with no overlap. Yet, the 4 Ps model has extensive overlapping problems. Several authors stress the hybrid nature of the fourth P, mentioning the presence of two important dimensions, "communication" (general and informative communications such as public relations and corporate communications) and "promotion" (persuasive communications such as advertising and direct selling). Certain marketing activities, such as personal selling, may be classified as either promotion or as part of
540-416: A more consumer-orientated version of the 4 Ps that attempts to better fit the movement from mass marketing to niche marketing . Consumer (or client) The consumer refers to the person or group that will acquire the product. This aspect of the model focuses on fulfilling the wants or needs of the consumer. Cost Cost refers to what is exchanged in return for the product. Cost mainly consists of
594-479: A multiplicity of new markets. Market segmentation can be defined in terms of the STP acronym, meaning Segmentation, Targeting, and Positioning . Segmentation involves the initial splitting up of consumers into persons of like needs/wants/tastes. Commonly used criteria include: Once a segment has been identified to target, a firm must ascertain whether the segment is beneficial for them to service. The DAMP acronym
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#1732786984255648-407: A product development strategy well, businesses should: Product development is considered riskier than market penetration and a similar risk as market development. In diversification an organization tries to grow its market share by introducing new offerings in new markets. Unlike other strategies that build upon existing strengths, diversification requires venturing into uncharted territory, where
702-472: A second language is an invaluable asset for those working on a project with global or wide-scale implications. Additionally, a unique qualification for product managers is having a background in engineering or computing because it allows for easier interaction with the technical staff. Marketing Marketing is the act of satisfying and retaining customers . It is one of the primary components of business management and commerce . Marketing
756-432: A section to the marketing mix. The 4Ps refers to four broad categories of marketing decisions, namely: product , price , promotion , and place . The origins of the 4 Ps can be traced to the late 1940s. The first known mention has been attributed to a Professor of Marketing at Harvard University, James Culliton. The 4 Ps, in its modern form, was first proposed in 1960 by E. Jerome McCarthy; who presented them within
810-416: A specific type of food (e.g. Got Milk? ), food from a specific area, or a city or region as a tourism destination. Market orientations are philosophies concerning the factors that should go into market planning. The marketing mix, which outlines the specifics of the product and how it will be sold, including the channels that will be used to advertise the product, is affected by the environment surrounding
864-407: Is a growth strategy where an organization aims to expand using its existing offerings (products and services) within current markets. In simpler terms, it seeks to increase its market share in the existing market landscape. It involves attracting new customers, retaining existing ones, or acquiring competitors to capture more of the existing market. To achieve increased sales for its current products,
918-490: Is a subset of marketing research. (Avoiding the word consumer, which shows up in both, market research is about distribution, while marketing research encompasses distribution, advertising effectiveness, and salesforce effectiveness). The stages of research include: Well-known academic journals in the field of marketing with the best rating in VHB-Jourqual and Academic Journal Guide, an impact factor of more than 5 in
972-415: Is a useful tool for organizations wanting to identify and explore their growth options. Although the risk varies between quadrants, with diversification being the riskiest, it can be argued that if an organization diversifies its offering successfully into multiple unrelated markets then, in fact, its overall portfolio risk is lowered. An approach to personal career development has also been developed using
1026-422: Is conducted for two main purposes: better allocation of a firm's finite resources and to better serve the more diversified tastes of contemporary consumers. A firm only possesses a certain amount of resources. Thus, it must make choices (and appreciate the related costs) in servicing specific groups of consumers. Moreover, with more diversity in the tastes of modern consumers, firms are noting the benefit of servicing
1080-420: Is diametrically opposed to the popular concept of B2C or Business- to- Consumer where the companies make goods and services available to the end consumers. In this type of business model, businesses profit from consumers' willingness to name their own price or contribute data or marketing to the company, while consumers benefit from flexibility, direct payment, or free or reduced-price products and services. One of
1134-455: Is new to the firm, in many cases a new product will simultaneously take the firm into a new, unfamiliar market. In that case, one of the Ansoff quadrants, diversification, is redundant. Alternatively, if a new product does not necessarily take the firm into a new market, then the combination of new products into new markets does not always equate to diversification, in the sense of venturing into
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#17327869842551188-401: Is the traditional planning approach where the organization identifies its desired goals and objectives, which are often based around what has always been done. Marketing's task then becomes one of "selling" the organization's products and messages to the "outside" or external stakeholders. In contrast, an outside-in approach first seeks to understand the needs and wants of the consumer. From
1242-531: Is typically conducted by the seller, typically a retailer or manufacturer. Products can be marketed to other businesses ( B2B ) or directly to consumers ( B2C ). Sometimes tasks are contracted to dedicated marketing firms, like a media , market research , or advertising agency . Sometimes, a trade association or government agency (such as the Agricultural Marketing Service ) advertises on behalf of an entire industry or locality, often
1296-410: Is used as criteria to gauge the viability of a target market. The elements of DAMP are: The next step in the targeting process is the level of differentiation involved in a segment serving. Three modes of differentiation exist, which are commonly applied by firms. These are: Positioning concerns how to position a product in the minds of consumers and inform what attributes differentiate it from
1350-1150: The Product Managers . The product manager then gathers the product requirements and creates a product requirements document (PRD). After that, product managers give the PRD to the engineering team. These roles may vary across companies. In some cases, product management creates both the MRD and the PRD, while product marketing does outbound tasks. Outbound tasks may include trade show product demonstrations and marketing collateral (hot-sheets, beat-sheets, cheat sheets , data sheets and white papers ). These tasks require skills in competitor analysis , market research , technical writing , financial matters ( ROI and NPV analyses) and product positioning. Product marketer's typical performance indicators include feature adoption, new revenue, expansion revenue, and churn rate . Product marketers are responsible for creating content for various purposes including sales, marketing, communications, customer engagement, and reviewers. In most cases,
1404-654: The Social Sciences Citation Index and an h-index of more than 130 in the SCImago Journal Rank are These are also designated as Premier AMA Journals by the American Marketing Association. Market segmentation consists of taking the total heterogeneous market for a product and dividing it into several sub-markets or segments, each of which tends to be homogeneous in all significant aspects. The process
1458-515: The sales process engineering perspective, defines marketing as "a set of processes that are interconnected and interdependent with other functions of a business aimed at achieving customer interest and satisfaction". Some definitions of marketing highlight marketing's ability to produce value to shareholders of the firm as well. In this context, marketing can be defined as "the management process that seeks to maximise returns to shareholders by developing relationships with valued customers and creating
1512-423: The basis of "distinct needs, characteristics, or behaviors who might require separate products or marketing mixes." Needs-based segmentation (also known as benefit segmentation ) "places the customers' desires at the forefront of how a company designs and markets products or services." Although needs-based segmentation is difficult to do in practice, it has been proved to be one of the most effective ways to segment
1566-399: The case of services marketing . Other extensions have been found necessary in retail marketing, industrial marketing and internet marketing. In response to environmental and technological changes in marketing, as well as criticisms towards the 4Ps approach, the 4Cs has emerged as a modern marketing mix model. Robert F. Lauterborn proposed a 4 Cs classification in 1990. His classification is
1620-404: The centrality of customer needs, and wants in marketing, a rich understanding of these concepts is essential: Marketing research , conducted for the purpose of new product development or product improvement, is often concerned with identifying the consumer's unmet needs . Customer needs are central to market segmentation which is concerned with dividing markets into distinct groups of buyers on
1674-405: The challenges and risks of changes to business-as-usual activities. An organization hoping to move into new markets or create new products (or both) must consider whether they possess transferable skills, flexible structures, and agreeable stakeholders. The logic of the Ansoff matrix has been questioned. The logical issues pertain to interpretations about newness. If one assumes a new product really
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1728-508: The company adopts more assertive promotion and distribution strategies. This can be accomplished by: Market penetration is generally considered the least risky of the four options, as it leverages the company's established strengths and market knowledge. In a market development strategy, an organization tries to expand into new markets, geographies or countries. It does not require significant investment in R&;D or product development and
1782-428: The competitor's products. A firm often performs this by producing a perceptual map, which denotes similar products produced in the same industry according to how consumers perceive their price and quality. From a product's placing on the map, a firm would tailor its marketing communications to meld with the product's perception among consumers and its position among competitors' offering. The promotional mix outlines how
1836-408: The consumer to attain the product, thus making them more likely to do so. Communication Like "Promotion" in the 4Ps model, communication refers to how consumers find out about a product. Unlike promotion, communication not only refers to the one-way communication of advertising, but also the two-way communication available through social media. The term "marketing environment" relates to all of
1890-517: The customer and answer the previously mentioned questions. PMMs execute their strategy using the following tools and methods: PMMs drive customer engagement by gaining a deep understanding of the product through its lifecycle. This product lifecycle includes pre-adoption, post-adoption/purchase, and after churning. PMMs collect customer information mainly through surveys and interviews. However, when available, PMMs will use product usage and competitive data to collect information. Users participating in
1944-450: The definition of marketing has evolved over the years. The AMA reviews this definition and its definition for "marketing research" every three years. The interests of "society at large" were added into the definition in 2008. The development of the definition may be seen by comparing the 2008 definition with the AMA's 1935 version: "Marketing is the performance of business activities that direct
1998-402: The existence of collaborative consumption leads to a decrease in product marketers' profits. On the other hand, consumers who share their goods in a sharing-based market are more willing to pay more for a higher quality product than if they were not in a sharing-based market. The standard educational requirement to become a product manager is a marketing or business degree. This can include
2052-457: The factors (whether internal, external, direct or indirect) that affect a firm's marketing decision-making/planning. A firm's marketing environment consists of three main areas, which are: Marketing research is a systematic process of analyzing data that involves conducting research to support marketing activities and the statistical interpretation of data into information. This information is then used by managers to plan marketing activities, gauge
2106-436: The feedback process are not allowed to write their own answers. Instead, they have a limited set of choices to select from. This restricted selection of options is used to gather information that helps inform the product roadmap and ultimately improve customer engagement. Product marketing is generally different from product management . The product marketing manager creates a market requirements document (MRD) and gives it to
2160-723: The flow of goods, and services from producers to consumers". The newer definition highlights the increased prominence of other stakeholders in the new conception of marketing. Recent definitions of marketing place more emphasis on the consumer relationship, as opposed to a pure exchange process. For instance, prolific marketing author and educator, Philip Kotler has evolved his definition of marketing. In 1980, he defined marketing as "satisfying needs and wants through an exchange process", and in 2018 defined it as "the process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return". A related definition, from
2214-415: The major benefit of this type of business model is that it offers a company a competitive advantage in the market. Customer to customer marketing or C2C marketing represents a market environment where one customer purchases goods from another customer using a third-party business or platform to facilitate the transaction. C2C companies are a new type of model that has emerged with e-commerce technology and
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2268-573: The management team can leverage existing products and take them to a different market. This can be accomplished by: This strategy is moderately risky by virtue of the fact that they're selling a products with proven strategies. In a product development strategy, a company tries to create new products and services targeted at its existing markets to achieve growth. This strategy tries to leverage an existing brand's reputation and customer loyalty by offering them new products and services that address evolving needs or capitalize on new trends. To implement
2322-506: The marketing environment. To overcome the deficiencies of the 4P model, some authors have suggested extensions or modifications to the original model. Extensions of the four P's are often included in cases such as services marketing where unique characteristics (i.e. intangibility, perishability, heterogeneity and the inseparability of production and consumption) warrant additional consideration factors. Other extensions include "people", "process", and "physical evidence" and are often applied in
2376-418: The marketing process (e.g. product design , art director , brand management , advertising, inbound marketing, copywriting etc.) involve the use of the creative arts. However, because marketing makes extensive use of social sciences , psychology , sociology , mathematics , economics , anthropology and neuroscience , the profession is now widely recognized as a science. Marketing science has developed
2430-462: The matrix, with expert development (same industry, same skills) corresponding to market penetration, industry transfer to market development, functional skill development matching to product development and retraining matching to diversification. Used by itself, the Ansoff matrix could be misleading. It does not take into account the activities of competitors and the ability for competitors to counter moves into other industries. It also fails to consider
2484-474: The monetary value of the product. Cost also refers to anything else the consumer must sacrifice to attain the product, such as time or money spent on transportation to acquire the product. Convenience Like "Place" in the 4Ps model, convenience refers to where the product will be sold. This, however, not only refers to physical stores but also whether the product is available in person or online. The convenience aspect emphasizes making it as easy as possible for
2538-458: The nature of a firm's marketing environment and to attain information from suppliers. A distinction should be made between marketing research and market research. Market research involves gathering information about a particular target market. As an example, a firm may conduct research in a target market, after selecting a suitable market segment. In contrast, marketing research relates to all research conducted within marketing. Market research
2592-466: The organization may have little or no prior experience. It is considered the riskiest strategy because it requires both product and market development. Introducing any product into a new market involves a lot of research. If the new product does not appeal to the local tastes, the business can face heavy loss, hence this approach is more suitable for large multinational corporations. Types of diversification can broadly be categorized as: The Ansoff matrix
2646-417: The place (i.e., distribution) element. Some pricing tactics, such as promotional pricing, can be classified as price variables or promotional variables and, therefore, also exhibit some overlap. Other important criticisms include that the marketing mix lacks a strategic framework and is, therefore, unfit to be a planning instrument, particularly when uncontrollable, external elements are an important aspect of
2700-420: The precise nature of specific concepts that inform marketing practice, the most commonly cited orientations are as follows: A marketing mix is a foundational tool used to guide decision making in marketing. The marketing mix represents the basic tools that marketers can use to bring their products or services to the market. They are the foundation of managerial marketing and the marketing plan typically devotes
2754-410: The product to prospects , customers , and others. Product marketing works with other areas of marketing such as social media marketing , marketing communications , online marketing , advertising , marketing strategy , and public relations to execute outbound marketing for their product. Product marketing addresses five strategic questions: Product Marketing Managers (PMMs) act as the voice of
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#17327869842552808-653: The product, the results of marketing research and market research , and the characteristics of the product's target market. Once these factors are determined, marketers must then decide what methods of promoting the product, including use of coupons and other price inducements. Marketing is currently defined by the American Marketing Association (AMA) as "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large". However,
2862-530: The sharing economy. The different goals of B2B and B2C marketing lead to differences in the B2B and B2C markets. The main differences in these markets are demand, purchasing volume, number of customers, customer concentration, distribution, buying nature, buying influences, negotiations, reciprocity, leasing and promotional methods. A marketing orientation has been defined as a "philosophy of business management." or "a corporate state of mind" or as an "organizational culture." Although scholars continue to debate
2916-460: The tactics and strategies in which a company promotes its products and services to individual people. Traditionally, this could refer to individuals shopping for personal products in a broad sense. More recently the term B2C refers to the online selling of consumer products.< Consumer-to-business marketing or C2B marketing is a business model where the end consumers create products and services which are consumed by businesses and organizations. It
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