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Business leaders have long used a framework known as the Ansoff Matrix to analyze their business. It is based on the idea of strategic planning. It classifies business strategies into four categories based on their relationship with the market.
Several companies, such as Google, Microsoft, and Apple, have already used Ansoff Matrix to better their position in the market.
In this article, we will discuss the fundamentals of the Ansoff Matrix and how it can be used for PPC campaigns.
In this guide, we’ll cover the following:
You can simply define the Ansoff Matrix as a strategic planning model that classifies business strategies based on their relationship with the market. It was developed by H. Igor Ansoff in the late 1950s
Ansoff Matrix can be used to identify alternative marketing opportunities for your company or product, allowing you to expand into new markets.
It can also be used to analyze your competitive position, facilitating the identification of new product/market opportunities for increasing its market share. Furthermore, it can be used to assess the degree of diversification within existing markets and which products should be eliminated.
The Ansoff Matrix is made up of four main categories. They are as follows:
Let us delve deeper into the four categories to understand better how they can be used on PPC campaigns.
The product development strategy is designed to improve the sales of existing products by making them more useful, affordable, or attractive. This strategy involves the development of new features on a product, improving its quality, or creating brand extensions related to the original product.
The essence of this strategy is to increase overall sales from existing products.
The market penetration strategy is designed to increase sales volume by making more potential buyers aware of your products. This strategy involves aggressive marketing and promotion activities such as advertising, public relations, and e-commerce marketing services such as PPC and SEO.
The idea behind this approach is that your current customers are valuable and that they will recommend your products to their friends, families, or business partners.
Take an example of a company that offers mobile phones with particular features. It can use the product development strategy by adding new features, improving quality, or creating related brand extension products such as cases and chargers. All this will help in increasing the sales from its original product line.
You can utilize this strategy in your PPC campaigns by focusing entirely on conversions. You can optimize your Google Ads to drive traffic towards the ultimate conversion.
The market development strategy is designed to enter new markets with the same product. These new markets may be related, international, or based on different demographics.
This is done by identifying unmet needs in untapped markets where there is room for your products or services.
Diversification
The diversification strategy is designed to enter new markets by offering completely different products to existing customers. Successful diversification requires elements of innovation or the creation of something new. You also have to clearly understand where your market is headed and what your target demographic is. Create strategies based on this knowledge, and you will see a successful increase in your market share.
Ansoff’s diversification strategy can be applied to optimize PPC campaigns in the following manner. You can augment your PPC campaigns by offering related products. For example, if you sell shoes online, you can target your ads towards accessories such as bags or belts. Or else, you can create different campaigns to target new customers.
Now that you know how to use the Ansoff matrix. Let us look at incredible Ansoff Matrix examples to inspire you. Our Ansoff Matrix examples come from successful case studies of companies that have incorporated Ansoff Matrix as part of their business strategy.
Xiaomi Inc. is a Chinese mobile phone manufacturer that entered the mobile phone market in 2011 with its Android-based MIUI operating system. Since then, it has become one of the biggest companies in China.
The company started using the diversification strategy when it entered the mobile phone market by launching products such as consumer electronics, household items, home appliances, software, and even bags.
It has invested in research and development to remain competitive and has sales offices in various countries such as India, Malaysia, and Indonesia.
Xiaomi Inc.’s diversification strategy helped in enhancing the company’s growth. It also helped in increasing the number of customers by targeting new markets. Therefore, it can be said that a diversification strategy is a great way to increase your success.
Market development strategy is a brilliant way to implement the Ansoff Matrix, as it involves targeting untapped markets. IKEA has adopted this strategy and has continued to thrive for over 30 years.
IKEA has grown into one of the most successful furniture retail brands globally. It has opened many home furnishing stores across the globe.
IKEA’s market development strategy is successful as it has constantly targeted new markets. To successfully implement this strategy, you must identify a new market that is segmented from your existing market.
People are always anticipating the next iPhone release. Apple Inc. knows this and has launched a new iPhone every year since 2007.
Apple’s iPhone is one of the most notable product development examples. Apple has always invested heavily in R&D to improve its products. Each device they release is loaded with new features.
So, their customers will always be looking forward to the next big thing. This strategy has been affecting the company’s sales positively since 2007 and has helped enhance Apple’s growth across the globe.
Its investment in R&D has sometimes seen it release products before its competitors. Keeping up with the market trends and anticipating the next big thing is a great way to keep your customers happy. It will also help you to remain competitive in the long run.
Apple’s iPhone product development strategy has helped create a market for itself. Customers are almost sure to purchase the next iPhone once it is out. Therefore, this strategy requires extensive research and analysis to be implemented successfully.
Marketing the new product to existing customers and getting them on board is another task. You must identify the target market for the new product and ensure that it is compatible with your existing products.
Fortunately, Apple has always convinced its customers that the new product is better than its predecessor.
The diversification strategy is a great way to implement the Ansoff Matrix. Google has been using this strategy to increase its revenue and improve its market share.
Since its launch in 1998, Google has been expanding its services. It started as a search engine and has now extended to software, online advertising, and hardware.
It has improved its products over the years to ensure that they are compatible with new trends. An example of this is the development of Chrome in 2008.
It also made a breakthrough when it successfully implemented the diversification strategy by launching the Android operating system to compete with iOS.
Google’s diversification strategy has been successful as it ensures that the company remains competitive and relevant in the market. It has helped the company earn a strong foothold in different technology areas.
Right now, there is no aspect of internet technology that Google has not dabbled with. Therefore, it is not surprising that the company has plenty of revenue to its name.
Many business owners have a hard time figuring out whether PPC campaigns are working or not. This is mainly because managing PPC campaigns is complex and requires constant monitoring. There are many PPC tools that an individual can use to monitor their campaigns’ efficiency. Getting a signal on time if something unusual happening in your campaign can be achieved through a PPC Signal.
However, it is crucial to understand that the success of your campaign will be determined by how well you can measure its efficiency. This is where using PPC Signal will prove to be beneficial. PPC Signal is a full-fledged Google Ads monitoring and optimization tool. It was developed specifically to ensure that your campaign is working as efficiently as possible.
You can monitor your Google Ads performance with PPC Signal to ensure that the campaign is on the right track. You can also determine which keyword has done better than others. This strategy will help in improving your
PPC Signal provides several filters to help you narrow down your search for a specific metric. This function is excellent as it ensures that you monitor only the relevant aspects of your campaign.
What are the 4 strategies of Ansoff Matrix?
The four strategies in the Ansoff matrix are market penetration, market development, product development, and diversification.
Coca-Cola is one of the Ansoff Matrix examples that use the Ansoff Matrix to identify its market growth and product development strategies. The company has identified untapped markets, tapping into them with its new products.
The company is constantly diversifying its product line to keep up with the changing trends.
Ansoff Matrix is a valuable tool that can be used to diversify your product line and introduce new products. It will help you to increase your market share and generate more revenue. The key is identifying potential markets and the existing ones to succeed in implementing these strategies.
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