Product Development
Ansoff’s Matrix – Planning for Growth
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This well known marketing tool was first published
in the Harvard Business Review (1957) in an
article called 'Strategies for Diversification'.
It is used by marketers who have objectives for
growth.
Ansoff's matrix offers strategic choices to achieve
the objectives.
There are four main strategies for selection.
Marketing Teacher Ltd 2000 - 2009
Ansoff's Product/Market Matrix
Market Penetration
 Here we market our existing
products to our existing customers.
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This means increasing our revenue
by, for example, promoting the
product, repositioning the brand,
and so on.
The product is not altered and we
do not seek any new customers.
Not just for kids!
Market Development
 Here we market our existing
product range in a new market.
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This means that the product
remains the same, but it is
marketed to a new audience.
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Ex. Exporting the product to another
country
marketing it in a new region
Expanding or defining a new TM
Expanded to
countries all
over the
world
Product Development
 This is a new product to be marketed to
our existing customers.
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we develop and innovate new products to
replace existing ones.
Such products are then marketed to our
existing customers.
Example: auto makers, where existing
models are updated or replaced, and then
marketed to existing customers.
Diversification
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This is where we market completely new products
to new customers.
There are two types of diversification:
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Related Diversification:
 we remain in a market or industry with which we
are familiar. (i.e. same type of good)
Unrelated Diversification:
 we have no previous industry or market
experience. (i.e. different type of good)
Diversification Examples
Developed a men’s line of
yoga and activewear
Started w/ food items,
expanded to paper products,
housewares and even
banking!
Manufacturer of cigarettes,
bought Kraft Foods in 1988
Case Study
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Colorado Ricardo
Mountain Bikes
In groups of 3, read the case
and determine specific
strategies that Ricardo can use
to increase sales of his
mountain bikes.
Stages of Product Development
Idea Generation
Idea Screening
Concept Development
Market Strategy – Feasibility Study – Product Design
Test Marketing
Market Entry
The Stages of Product Development
1. Idea Generation
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what NEW product would consumers WANT or how can
we make an EXISTING product BETTER
2. Idea Screening
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Not all ideas, at first, are good ones
3. Concept Development
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Create a prototype = sample of product
4. Market Strategy
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Figuring out who the TM is (demo, geo, psychographics,
to put together a marketing plan to implement the
strategy)
The Stages of Product Development
5. Feasibility Study
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Can we advertise, promote, distribute, transport, store,
package, make, sell…this product? Will people buy it?
Will we make money from it?
6. Product Design
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What does our TM like? Colour, features, material,
traditional, trendy
7. Test Marketing
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Give your product to your TM to ‘test’ out
TM can fill out a survey to give you feedback
8. Market Entry
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Your product/service enters the product life cycle (PLC)
(introduction stage)