Matrixes and Maps

Product/Market Expansion Matrix

map out the company’s growth pattern/strategy

Market Penetration (Matrix 1)

• function - focuses on increasing sales

• typical tactics = increasing marketing, promotional, and discounting efforts to attract new customers

• improve product quality to encourage repeat purchases

• least risky, but growth may be limited

EXISTING BOTH

Product Development (Matrix 1)

• function - aims to leverage your brand’s reputation & customer loyalty

• example - mcdonalds introducing salads in addition to burgers & fries

NEW P EXISTING M

Market Development (Matrix 1)

• function - enables companies to leverage their proven product offering while tapping into fresh sources of demand

• typical tactics = adapting products or marketing messages to appeal to new demographics; establish a presence in untapped geographic markets; partner with new distributors or retailers to reach wider audiences

• example - apple launching iphone in china

• often requires large investments in market research, localization, and infrastructure development

EXISTING P NEW M

Diversification (Matrix 1)

• function - launch new products into entirely new markets—highest risk, but potentially high reward

• related vs unrelated diversification

• Example - Apple launching Apple Watch (computers to health/fitness); Virgin Group (record company to airlines)

NEW BOTH

International Product/Communication Matrix

To define a company’s entry strategy into a new international (host) market

Straight Product Extension (Matrix 2)

Marketing a product in a foreign market without making any changes to the product or the promotional message.

It assumes consumer needs are universal across boundaries and is highly cost-effective due to economies of scale

Product Adaptation (Matrix 2)

Modifying the product to meet local conditions, preferences, or legal requirements while keeping the original communication strategy. (I.e. changing ingredients, packaging, or technical specifications)

Communication Adaptation (Matrix 2)

Selling the same product but fully adapting the advertising messages to suit local markets.

This is used when the same product serves a different function or provides different benefits in different cultures (e.g., bicycles used for recreation in one country but basic transport in another)

Dual Adaptation (Matrix 2)

Changing both the product and the communication strategy to fit the target market.

This strategy is used when environmental conditions, consumer preferences, and the product's function all differ significantly from the home market

Buying Behavior Matrix

classifies consumer decisions into four types based on the level of involvement (high/low) and perceived differences between brands (significant/few)

Complex Buying Behavior (Matrix 3)

Consumers are highly involved in the purchase, researching extensively due to significant differences between brands

Example: Buying cars, picking a college

What companies need to do: Train sales people, tons of advertising/promotion of the brand

Variety-Seeking Buying Behavior (Matrix 3)

Low involvement, but significant differences between brands. Consumers switch brands frequently not due to dissatisfaction, but for variety

Example: Buying toothpaste or shampoo

What companies need to do: talk about what makes you different (attributes), price, promotion, innovation

Dissonance-reducing Buying Behavior (Matrix 3)

High involvement, but few differences between brands. The consumer may shop around but decide quickly, focusing on price or convenience, and may feel dissonance (regret) if the product fails to perform

Example: Buying carpet

What companies need to do: before purchase after money back guaranteed, after purchase contact buyer

Habitual Buying Behavior (Matrix 3)

Low involvement and little brand differentiation. Purchases are made out of habit rather than loyalty

Example: buying salt

What companies need to do: focus on price, frequency of ads, and shelf space

Competitive Strategy

Mission

Strategy (1. Generic strategy 2. Competitive strategy - Porter’s model)

Initiatives

Generic (overall directional) strategy

i. Growth

• Concentration (growth by doing the same)

• Diversification (growth by doing something different)

  • Concentric Diversification - related products

  • Lateral (Conglomerate) Diversification - Entering entirely, new unrelated industries or markets with no ties to current operations

ii. Stability

iii. Retrenchment (shrink & be smaller)

Competitive Strategy - Porter’s Model

i. Overall Cost Leadership

• Broad target segment

ii. Differentiation (company competes by providing unique goods and services; features need to be desirable)

• Different features with uniqueness

• Broad target segment

iii. Focus - company is competing by targeting one (or two) small segment

Product Taxonomy

Product Line 1: Oral Care

• PC 1: Toothbrushes

  • SKU 1: 3.2 oz burst min

  • SKU 2: 6.8 oz dynamite

• PC 2: Toothpaste

Product Line 2:

• PC 1: Household Care

• PC 2: Toilet Paper