Growth and Downsizing Strategies: Market Expansion

Developing Strategies for Growth and Downsizing

Product/market expansion grid is a portfolio planning tool for identifying company growth opportunities through: market penetration, market development, product development, diversification.

1) Market penetration

Market penetration is a growth strategy for increasing sales to current market segments without changing the product.

2) Market development

Market development is a growth strategy that identifies and develops new market segments for current products.

3) Product development

Product development is a growth strategy achieved by offering new or modified products to current market segments.

4) Diversification

Diversification is a growth strategy that involves starting up or acquiring businesses outside the company’s current products and markets.

Example: McDonald's is now rolling out a new McArabia line to add to its menu line-up.

Define Downsizing

Downsizing is the reduction of the business portfolio by eliminating products or business units that are not profitable or no longer fit the company’s overall strategy. Example: BlackBerry.

Planning Marketing: Partnering to Build Customer Relationships

Value chain: A value chain is a series of departments that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products. Example: Carrefour's goal is to create customer value and satisfaction by providing shoppers with the products they want at the lowest possible prices.

Value delivery network: The value delivery network is made up of the company, suppliers, distributors, and ultimately the customers who partner with each other to improve the performance of the entire system.

Market Segmentation, Targeting, Differentiation, and Positioning

Discuss the differences: Market segmentation, targeting, differentiation, and positioning are distinct but interconnected elements of strategic marketing.

• Market segmentation: The division of a market into distinct groups of buyers who have distinct needs, characteristics, or behavior and who might require separate products or marketing mixes.
• Market segment: A group of consumers who respond in a similar way to a given set of marketing efforts.
• Market targeting: The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.
• Market positioning: Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of the target consumer.
• Marketing mix: The set of controllable tactical marketing tools—product, price, place, and promotion—that the firm blends to produce the response it wants in the target market.