Generic meanings of the Ansoff’s Matrix:
Market penetration: This involves selling more of an existing product line into existing markets. Possible opinions are persuading retained customers to use more on attracting new customers all together this is normally only viable when a market is growing.
Product development: Requires the organisation to develop modified version its existing products which can appeal to existing markets. By tailoring the products more especially to the needs of existing consumers the organisation can be strengthen the competitive position.
Market development: Entails expanding into new markets with existing products. These may be new markets geographically new market sectors or perhaps uses for the product.
Diversification: A new product in new markets is a much more risky strategy because the organisation is moving into areas in which it has little or no experience.
Examples of how Tesco could use this matrix guide to grow:
Market penetration: Tesco can increase their sales to the existing markets for example on finest products that they sell currently in all Tesco’s.
Product development: In April 2012 Tesco re-launched its own brand Tesco value range as 'Tesco Everyday Value', with new packaging and recipes. This shows that Tesco have develop modified versions its existing products which can appeal to existing markets.
Market development: Tesco have recently opened in India this show that they are expanding new markets with existing products.
Diversification: Tesco have introduced new services to their customers such as home insurance, car insurance, mortgages and other services this show that they are diversifying as they are going to new markets and exploring different things which can be a risky strategy because the organisation is moving into areas which it as little or no experience.
Branding: Is a process that involves in creating a unique name and image for a product it is linked with logos, strap lines, brand promise, colours and associated benefits. The benefits of a having a strong brand image is that it creates an image of an established business that has been around for long enough to become well known. A branded business is more likely to be seen as experienced in their products or services, and will generally be seen as more reliable and trustworthy than an unbranded business. If a business has a strong brand, it allows them to link together several different products or ranges. They can put their own brand name on every product or service they sell, meaning that customers for one product will be more likely to buy another product from them. Tesco have selected different use of branding such as Tesco value, Tesco standards, Tesco finest, Tesco organic and Tesco Whole foods. Tesco are trying to ensure that they are growing in terms of making profit in all aspects of their branding. Tesco are ensuring that they are making a profit by charging customers competitive prices. Tesco do their advertising usually from television ads Tesco's main advertising slogan is "Every little helps. When advertising on television voiceovers are provided by recognisable actors and presenters.
Relationship marketing: This is when a business focuses on the long-term value of a customer. Which basically means identifying valuable customers and initiating relationships for example in Tesco the Clubcard scheme allows them to track the shopping habits of 13m British families. Tesco Clubcard is the world’s most successful loyalty scheme Tesco has linked the understanding of customers to loyalty and profit. The Tesco rewards includes: 1 point for every £1 that a customer pays, they can also receive double points when items on special offers, vouchers are received to the value of points they have saved i.e. money spent, Clubcard deals worth 4x value and can be used in store or online. The Tesco rewards scheme can micro-segment their customers by lifestyle personality traits e.g. impulse buying from their shopping baskets, they can also target with newsletters. Targeting communication: Tesco hired a company dunhumby to draw relationships and marketing strategies from the information that they have which is on their database. They can target customers directly with product offers which they have a want and a need there are four million variations of their quarterly mailing offers. An action plan is the analysis of the buying patterns of all their customers can be translated into retail and marketing action plans they have an advantage over their competitors in 11 different key areas of the business which are consumer trends, targeted communications, accurately measured promotions, basket building, defence against competitor activity, right product in right place, negotiation power, cross-selling, site locations, seasonal peaks and global growth. Segmentation is essentially the identification of subsets of buyers within a market who share similar needs and who demonstrate similar buyer behaviour. Using segmentation analysis helped Tesco PLC, Britain's largest retailer stores to decide on their future marketing strategy and to appraise their competitive strengths Tesco realized the requirements for effective segmentation and that it must be Measurable, accessible, Differentiable, Substantial and Actionable
To measure the size, purchasing power and characteristics of each segment Tesco used Club card program, giving cardholders discounts in exchange for their name, address and other personal information and optional questions about the size of their household, the ages of their children and dietary preferences they used this data to gain customer feedback which allowed Tesco to do further study on consumer segmentation on their purchasing behaviour. The Differentiability is very essential for an effective segmentation so Tesco offered different Benefits to the same Club card program is depending on demo & psychographic profile of each segment
For the segmentation to be sustainable Tesco target was identical and large so it was always profitable enough to serve by analyzing the data that club card generates Tesco was able to group the customers into segments according to their similar needs and benefits those are examples of grouping the customers keyed to their buying profile in Tesco's database.
Apple is an American multinational corporation that designs and sells consumer electronics, computer software, and personal computers. The company's best-known hardware products are the Macintosh line of computers, the iPod, the iPhone and the iPad its software includes the OS X and iOS operating system As of July 2011, Apple has 364 retail stores in thirteen countries as well as the online Apple Store and iTunes Store. It is the largest publicly-traded corporation in the world by market capitalisation, with an estimated value of US$626 billion as of September 2012. The Apple market cap is larger than that of Google and Microsoft combined. As of September 24, 2011, the company had 60,400 permanent full-time employees and 2,900 temporary full-time employees worldwide; its worldwide annual revenue in 2010 totalled $65 billion, growing to $108 billion in 2011. During the course of this assignment I will be focussing on the iPhone exploring growth strategies, branding and relationship marketing.
Aims and objectives for Apple:
- To maximise profit
- To be the dominant high-tech brand in the whole world
- To invent products that will be useful, handy and sleek that will appeal to consumers all over the world, with a special focus on developed countries like Canada and the US, Europe, and the populous Asian countries like China, Japan, India and South Korea.
Apple’s growth strategies:
The Ansoff’s matrix can be used in Apple as it can help an existing product increase sales to the existing market which is referred to ‘market penetration’. The diagram can help Apple to have new product developed for existing markets which is called ‘product development’, ‘market development’ is when Apple can use their existing products sold to new markets. ‘Diversification’ is when Apple can use new products sold in new markets for example they have recently introduced a new iPhone 5.
Examples of how Apple could use this matrix guide to grow:
Market penetration: Apple can increase their sales to the existing markets for the iPhone 4 and 4S as currently all Apple stores sell these product across the globe.
Product development: On September 12, 2012, Apple unveiled the iPhone 5, featuring an enlarged screen, more powerful processors, and running iOS 6. It was made available on September 21, 2012, but has already become Apple's biggest iPhone launch; with over 2 million pre-orders pushing back the delivery date to late October. This shows Apple are producing the latest product and developing the latest technology and the latest software on the new iPhone 5. Apple has developed modified versions by simply adding more powerful processors.
Market development: Apple have recently opened in Hong Kong in September 2011 this show that they are expanding new markets with existing products.
Diversification: Apple has not diversified with their products however Apple has a much more diverse product line now than it had a decade ago. This could have lead to a certain lack of focus, but is hasn’t. Apple may be called many things, but unfocused isn’t one of them. All these new products have only served to make the company stronger and much more profitable, more valuable.
The product lifecycle stage shows the existence of a particular product for example if we relate the lifecycle stages to Apple during the introduction Apple have just recently announced the iPhone 5 and will grow for the coming years. When we reach the maturity peak we can see in the graph that it still high this is due to the fact that Apple is still selling iPhone 4 and iPhone 4s. However, the line of the graph is falling down as this shows that the iPhone 3GS is currently in decline.
Branding: Is a process that involves in creating a unique name and image for a product it is linked with logos, strap lines, brand promise, colours and associated benefits. The Apple brand is leading amongst several highly competitive markets, including the computer industry with its Macintosh computers, the consumer electronics industry with the iPod, and presently, the smart phone market with the Apple iPhone. The Apple brand personality emphasises on making people’s lives easier they have done this by making their products accessible for their customers. Apple’s branding strategy has proven to be effective so far. It has been steadily gaining new customers, its sales and margins has been growing rapidly since 2006 and it has achieved some of its record breaking financial results the past couple of years. Apple launched the iPhone which was also a successful feat. In 2007, the iPhone’s release was one of the most greatly anticipated products for many years. By 2008, over 1 million 3G iPhone units have been sold in just 3 days of its release worldwide. The benefits of having such a strong brand for Apple is that e.g. premium pricing and the instantly recognisable logo that they have and this is incorporated into their advertising, the brand strengths including stronger supply chains, high quality of products being produce Apple have premium prices due to the quality of the products.
Relationship marketing: Apple has had the distinct ability to encourage consumers to purchase an apple product, and then maintain that customer’s loyalty for years to come. But how is Apple able to create such loyal customers? Their products are innovative and easy to learn, but there is also a financial cost that many consumers over the world are hesitant to invest in. As soon as consumers start buying products from Apple, they find it difficult to move to products made by someone else. Apple’s marketing in a very straightforward way Apple makes great products, but its marketing practices limit your choices and cost you more money. Although this potentially sounds negative, many consumers are pleased with their purchases and commitment to the Apple brand as they except quality from Apple. This loyalty may very well be company encouraged, but nonetheless consumers are attached with Apple products over time. Apple's after-care policies have become an integral component in its success at establishing strong customer relationships. Apple will now replace all defective products in that Korea with new devices within the first month of purchase. The company will even replace devices that become defective after the first month with a new model if the issue is obviously caused by a manufacturing issue. Apple had previously offered the policy to Korean customers with its iPhone last year, but has now expanded it to all of its devices, except for the iMac. The Genius Bar is a tech support station located inside every Apple Retail Store, the purpose of which is to offer help and support for Apple products. Employees are specially trained and certified at the Genius Bar. Their role is to help customers with Apple hardware and software. The employees can also be viewed as the local representatives of Apple Care. They offer personal support when customers have problems or questions with their Apple products. Most services carried out at the Genius Bar are free. Non-warranty service (which is paid for by the customer when repairs are complete) is also routinely performed.