Marketers analyze the market opportunities for the company’s
products and/or services towards the target markets.A good planning tool for analyzing market opportunities is
Ansoff’s product/expansion grid.This
tool helps identify new market opportunities by considering four
Penetration, which is used to find new ways to increase sales with the
current product without having to change it.This tactic is to convince users of similar products made by
another company to switch to its product, such as how Pepsi tries to
convince drinkers of Coca-Cola to switch.Other tactics are by cutting prices or improving advertising to
make the product enticing, thus encouraging new and current customers to
buy more of the product.
Development, which is used to find new market segments for the current
product.Ways to accomplish this
would be to expand distribution channels, sell in new locations, or find
new users.An example would be to
look for new demographic markets to try and attract working moms or senior
citizens to buy a product they currently do not use.
Development, which is used to grow the business by improving existing
products or developing new ones into market segments in which you are
already successful.Developing new
features, improved technology, and improved quality are just a few
which is used to grow the business by starting up an entirely new product
line outside the present business.One factor to consider when thinking about diversifying the company
would be the strengths and weaknesses of the competition.The diversification strategies are of
·Concentric Diversification Strategy: Develop new
products with the earlier technology for new segments.
·Conglomerate Diversification Strategy: Develop
new products for new markets.
·Horizontal Diversification Strategy: Develop new
products with new technology for old customers.
Before taking on new market opportunities, it is important
to be sure your company has the financial capital to fund the costs.If not, you’re putting your company at
risk.If so, does your company have the
necessary production facilities and the expertise to successfully produce and
market the product and/or service?If
so, then you need to look at the distribution capacity to get the new product
into the marketplace.If this is not
likely, then it might be a better idea to pass on the opportunity.
If an opportunity were considered viable, determining the
market segment you want to target would be the next step.
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