: A firm with a market for its current products might embark on a strategy of developing other products catering to the same market. For example, McDonalds is always within the fast-food industry, but introduces new products regularly. When a firm creates new products, it can gain new customers as a result, for this reason, new product development can be crucial in business development strategies for firms to stay competitive and successful.
: An established product in the marketplace can be tweaked or targeted to a different customer segment, as a strategy to earn more revenue for the firm. For example, Lucozade was first marketed for sick children and then rebranded to target athletes. This is a good example developing a new market for an existing product.
means going form one market to a completely new market for example- Virgin Mega stores, Virgin Airlines, Virgin makeup are examples of new products created by the Virgin Group of UK.. This resulted in the company entering new markets where it had no presence before.
Presently in the Ansoff matrix I am at the product development stage. This is because I am currently in the early stages of developing my beer, meaning I am a new competitor entering an age old market. My competitors are at different stages in the Ansoff matrix, and like me they all had to start form the ‘product Development’. For example, Coors is at the stage of market penetration with its product ‘Coors light’ because they are selling the existing product onto an already existing market and they want to sell to more people within the market. They created Coors light because a lot of their business would come from women who are increasingly worried about weight and image.
Boston Matrix:
Like Ansoff's matrix, the Boston Matrix is a well known tool for the marketing manager.
This is simplistic in many ways and the matrix has some understandable limitations that will be considered later. Each cell has its own name as follows.
Dogs
These are products with a low share of a low growth market. These are the canine version of real turkeys. They do not generate cash for the company, they tend to absorb it. When my product is out on the market and if it ends up like this I will take it off the market because it will be using up more money than it is making, so it would be in my bets interests if I got rid of it and maybe bring out a new one in place of the old one. This hopefully would make up for losses.
Problem Children
These are products with a low share of a high growth market. They consume resources and generate little in return. They absorb most money as you attempt to increase market share. This is where I am in the Boston matrix because I will be new in the market and I will be only starting out so not many people know that I exist so I will be spending more money on trying to produce my product and getting people to bye it so I will progress and make money and someday maybe become a star.
This stage is very risky for me and also for any business because it is make or break time for my product.
Stars
These are products that are in high growth markets with a relatively high share of that market. Stars tend to generate high amounts of income. Someday hopefully if my product is successful and generates more money than it takes to produce it I will be a star or perhaps even a cash cow.
Cash Cows, Problem Children and Stars need to be kept in balance. The funds generated by your Cash Cows are used to turn problem children into Stars, which may eventually become Cash Cows. Some Problem Children will become Dogs, meaning you will need a larger contribution from the successful products to compensate for failed products.
Cash Cows
These are products with a high share of a slow growth market. Cash Cows generate more than is invested in them. If someday my product reaches cash cows I will be making more of a profit because they make more money than it costs to produce them, for me this will be better because I will be making more money and won’t have to put in any extra time or energy.
