Launching a new product to an existing market – there’s more to marketing planning than blue sky thinking
In this series of articles, I take a look at an easy-to-use strategic marketing planning tool. Known as the Ansoff Matrix, the enduring popularity of it is probably down to its simplicity. In short, it says a business has only four possible strategic choices – depending on whether you choose to market new or existing products in new or existing markets.
‘Where to play and how to win’ is a great phrase summarising the benefits of using it. In these articles I have provided examples to make particular points and help develop your understanding of it, and how you can apply it to your business when planning its strategic direction.
As a reminder, please click here to see the Ansoff Matrix and the different strategy options.
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Product development is concerned with launching a new product to an existing market.
There are a number of options here, including offering additional new products, product upgrades or modifications such as different features, sizes and prices. This can be to either replace existing ones or offer in addition to existing product lines.
It can also be to give current customers a greater choice or to try and reach a more diverse new customer base. Other options are different or improved quality levels, additional support services around the core product and updated packaging for regularly purchased consumer goods.
The costs for this strategy are comparatively high because the development of new products or services is expensive.
In the technology sector, Apple have become one of the masters of this over the last 15 years. The original iPod is one example which was followed with a number of variations in terms of features memory size and capacity and price. When the new features are added there’s a price rise, trading up may occur with the perceived enhanced value of the product on repurchase.
A question – to paraphrase the old ‘If Carlsberg did…’ TV ad campaign – what would happen ‘If Apple made the product that you sell…’. It’s not all roses for Apple though, as the next example shows
Another product development option is the replacement of an old product with a fundamentally different one, often based on technology changes. Microsoft’s operating systems are example of this, with the older software continuing to be supported and marketed. Apple nowadays appear to provide much less support for older operating systems and much more built-in obsolescence – their products are now much less repairable than they used to be.
Question – if you are in the technology sector, is there a comparable situation with regard to software updates and consumables? Should there be legislation to force technology companies to provide more ongoing support for older hardware – and would they encourage customer loyalty by doing so?
On the subject of customer feedback Manufacturers should respond to customer feedback and have dialogue with customers – they can then better adapt an existing product to a new target group.
A good example of this is second-hand/nearly new cars bought without having to leave your home mentioned above. The car is bought online without actually having physically been seen. Providers such as Cazoo make sure that any negative reviews left on Google are responded to promptly and personally with a named person investigating the problem being provided.
Question If you are an agent for a product or service at a local level – are you able to influence your head office’s product development strategy? Market research among potential customers and influencers can help here.
Away from the technology sector – other examples of this done really well is Halfords, who have for some time fitted replacement car light bulbs and not just sold you the bulb – a ‘no brainer’ for everyone.
Next time I take a close look at the fourth and final strategy – diversification
Click here to read – Getting started: developing your business strategy with an easy-to-use marketing planning tool.
Click here to read – Developing your marketing plan – basic product/marketing strategy options using the Ansoff matrix.
Click here to read – Marketing planning: strategy options with the Ansoff matrix – ‘market penetration’.
Click here to read – Marketing your business: strategy options using the Ansoff matrix – ‘market development’.
For a free, no-obligation 30-minute chat about marketing your business in 2021, please get in touch.
There’s more to marketing planning than blue sky thinking