Introduction
Marketing planning is essential for companies ready to grow and increase their market talk about. Market research is essential part of planning as it allows companies to find such vital information as what the main features of the market are and what prospects want. [] There are many tools made to help businesses develop successful marketing plans and utilize them to be able to grow. Among them is Ansoff Field, which was suggested by an American strategist Igor Ansoff in 1957.
A reason for this paper is to analyse the Ansoff Container and show how it works using a company as an example. The company that was chosen is Amazon. com. Being one of the most successful companies in our time, it symbolizes the perfect business and marketing strategies in action. Strategies recommended in the Ansoff matrix are able to help Amazon increase its market share as well as attract clients to the company's products and services.
In his matrix, even as we can see from Number 1, Ansoff explains a product-market strategy, dividing it into four parts which derive from two types of products and marketplaces: existing and services, and existing and new markets respectively().
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Figure 1. Ansoff package (matrix)
Description and research of the model
First strategy, called Market penetration, is to help companies increase their show of an existing market for existing products. This can be done through different ways. The simplest way is to get infrequent customers and transform them into regular customers. Another ways are to get consumers of competition and customers who should be buying this product but are not buying it for a few reasons. In order to do so, an organization needs to pay more attention on marketing campaign and create more customer value. [] For instance, Keylogg's have found that ingestion of cornflakes rises during Xmas. Hence, they decided to increase their sales during this time period through advertisements. Another example is Starbucks. They sell more espresso to customers who have reloadable Starbucks cards. Its commitment program stimulates customers to buy more to attain different degrees of 'membership'.
Market penetration is vital part of marketing strategy because keeping existing customers is cheaper than finding new ones. However, this plan has its downsides. If a company has a high market share, it is possible that development opportunities are limited. Another example is that hostile market penetration strategies increase competitive rivalries and lead to a price war, which might reduce industry's success.
Market development is a technique which identifies the ways of market extending through adapting company's existing product to new markets. This often requires changing of some product's characteristics therefore the product can satisfy needs of the new marketplaces, which might be not the same as those of the existing one. Several ways of entering new marketplaces can include new geographical marketplaces, new means of using the merchandise. Lucozade sport drink is a good exemplory case of finding new means of using old products. It had been created as a treatment for colds and flu. However, nowadays this can be a well-known athletics drink. Another exemplory case of market development is English 'Tesco' opening chain stores in the USA called 'Fresh and Easy'.
Next strategy is called Product development. This plan is useful in case of launching services for existing market. The products can either be just like ones being produced or very different products. In this strategy, companies continue steadily to give attention to the demands of existing customers nonetheless they also make an effort to understand what else customers might want predicated on what they purchase. By doing so, they can see opportunities for new products, such as complementary products for existing products (cellphone cases, laptop totes, etc. ) or new products that are better and are able to replace the old ones. One of these of the strategy is McDonalds introducing new salads in their menu in order to keep people who choose more healthy food. Other examples are Starbucks advertising cakes and sandwiches for breakfast time in addition to caffeine and Apple offering covers and situations for its iPads and iPhones.
The previous strategy is Diversification. This plan is made for companies thinking about launching services into new market segments. This strategy entails the highest risk and requires deep market research. It often leads to changing company's business structure in order to achieve success. There are two types of diversification: concentric and conglomerate.
Concentric diversification is a kind of diversification in which a company performs in a related market and launches products which have similar characteristics with the merchandise already being produced. The strong aspect of concentric diversification is that a company is able to use existing resources and could count on its experience. Thus, this kind of diversification is less risky than another one. Computer manufacturers needs to produce notebook computers and tablets are examples of concentric diversification.
Conglomerate diversification is for companies producing new products that are unrelated to existing ones or have little regards to them. This strategy entails an increased risk as it is hard to predict its end result. If a fresh product fails it could lead to reducing the overall brand's reputation. Among not successful illustrations is Microsoft using its Zune music player. Achieving success in software market, Microsoft ventured to type in the hardware market. Starting Zune Microsoft designed to assault Apple's iPod market share. Despite its reasonable characteristics in conditions of configuration, a few of which could outperform the iPod, because of the wrong marketing strategy sales of Zune failed and Microsoft shut the project. Nokia, on the other hand, is a successful example. The company started out as a paper manufacturer and eventually became the biggest mobile phone company in European countries. Conglomerate diversification, albeit risky, can lead to rapid progress and income.
