For a small fee, customers could create their own private blend of coffee. Dogs are generally considered cash traps because businesses have money tied up in them, even though they are bringing back basically nothing in return. Such products are then marketed to our existing customers. As can be seen in the example above, Arm and Hammer was able to generate new uses for an existing product. Question Marks: These parts of a business have high growth prospects but a low market share.
Defensive reasons may be spreading the risk of market contraction, or being forced to diversify when current product or current market orientation seems to provide no further opportunities for growth. There exists a more robust factor of risk, however this can be balanced out through the understanding and make use of existing marketing as well as distribution channels. Developing a strategy with existing products and markets is low in risk, but with new products and markets risk increases. The current moneymakers are easy to identify now, but what about the future? Political development is not so relevant in this instance as Pizza Hut has an existing established branch which is not affected by this external factor, the political issues are not so important because they do have the outlet in India and Baroda. The new product means those products which are new to the company, not necessary that they are new to the market.
There are various approaches to this strategy, which include: New geographical markets, new distribution channels, new product packaging, and different pricing policies. The indirect costs associated with the undertaking the project will have to ascertain. An established product in the marketplace can be tweaked or targeted to a different customer segment to earn more revenue for the company. For a full case study of a market penetration strategy,. Market penetration seeks to achieve four main objectives: Increase usage by existing customers, maintain or increase the market share of current products42.
There is related diversification and unrelated diversification. It is fundamentally a planning tool. It would also mean setting up other branches of the business in other areas that the business had not ventured yet. This strategy is used when the firm targets a new market with existing products. Market development is the name given to a growth strategy where the business seeks to sell its existing products into new markets. Product Existing New Existing Market penetration Product development New Market development diversification Market Market penetration: market penetration is used to achieve the growth in the existing market with the existing product40.
Diversification allows a business to move away from the trust upon the present market and product47. It is the most risky of the four go-to-market strategies because both product and market development are required to be successful. It is important to note that these four outputs are not mutually exclusive and often times organisations engage in more that one strategy depending on the environment in which they operate. The goal of this strategy is to attract new customers for existing products. An example of diversification is Samsung. Just pick a template and enter your information.
To learn more, visit our. Customers use these vouchers and specials when ordering in bulk or for everyday orders. Taking a product to a different market is a frequently used tactic, though slightly riskier than market penetration. Market penetration uses the marketing mix to push the product which is gaining as much as market share and as quickly as possible41. For instance: When the present market is completely saturated, it switch to new markets. If a star can remain a market leader, it eventually becomes a when the market's overall growth rate declines.
It began as a trading company, later expanding into insurance, securities, and retail. Pizza Hut encourages customers to use their outlet more regularly by providing new taste to the customers43. You need to get your payoff from growth when the growth slows; you lose your opportunity if you hesitate. The Product Market Expansion Grid offers four main suggested strategies: Market Penetration, Market Development, Product Development, and Diversification. One technological factor which could effect the environment is how Pizza Hut creates its products such as the production line in which a pizza is made. The matrix has been used since 1968 to help companies gain insights on what products best help them capitalize on market share growth opportunities. In this strategy, the business sells its existing products to new markets.
I commercially expect that the opening of the new firm will lead to increase in sales in Baroda, Gujarat, and could increase the market share of Pizza Hut. The company could seek new products that have technological or marketing synergies with existing product lines appealing to a new group of customers. There are three diversification strategies that an organisation can consider: concentric diversification, horizontal diversification, and conglomerate diversification. Diversification is the most risky of all the approaches. That said, there is no one best strategy to select, with each offering different benefits to companies in various circumstances.