Selecting Marketing Strategies

  • Ansoff's Matrix
  • Strategies for investing in international markets
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Low Cost vs Differentiation

Low Cost

  • applies to both niche and mass markets,
  • aim is to iffer products at a lower price than competitors in the market
  • to achieve this the firm must be able to reduce its own costs (e.g. through economies of scale) by finding the lowest cost suppliers or by moving its own operations to a low cost location


  • applies to both niche and mass markets
  • purpose is to create a USP so as to make the product superior to others in the market
  • a differentiation strategy involves all elements of the marketing mix, for example pricing will reflect the exclusivity of the product and the distribution will be strictly controlled if possible to maintain this image
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Ansoff's Matrix

Market Penetration

  • aims to increase sales of current products to existing customers to entice consumers away from competing brands through more promition, reduction in price etcv
  • Carries the least risk

Market Development

  • Trying to increase sales or present products by selling them to new markets
  • Risky as it requires extensive research targets at new segments/geographcal markets
  • emphasis on promotion
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Ansoff's Matrix continued....

Product Development

  • Entering a new product/product line into an existing market or developing product/services/functions/performance.


  • carries the biggest risk; new product AND new market
  • requires extensive market research
  • amount of research and development necessary can be very expensive
  • can actually help to spread risk - new products to rely on in new markets if old products fall our of favour
  • can be related diversification (same industry) or unrelated.
  • E.g. nokia diversifies in tyres
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Strategies for investing in international markets


  • UK market is saturated or very competitive
  • Opportunities abroad to achieve economies of scale
  • firm has excess capacity
  • additional costs involved are very small


  • Exporting from UK through accepting international orders and making regular visits to the target country
  • Opening an overseas operation by forming an alliance with a local company or setting up a registed subsidary with locally recruited employees
  • Using an overseas sales agent benefiting from their knowledge in return for a high salary
  • Giving control to distributor to buy and sell goods in the target market and benefiting from their expertise of that market
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