Product – market mix is a marketing tool that outlines the various strategies that an organization can use to increase the market share or introduce a new product. Strategic planning involves looking at the various ways or strategies that can help your business achieve competitive advantage. The strategy used by a company depends on whether or not the company’s product is already in the market.
The product-market mix has four main strategies as can be seen below:
This is a strategy where an organization focuses on selling existing products into the already existing markets. This strategy aims at achieving four key objectives which include:
1. To maintain or grow the market share of the current products
2. To secure dominance of the growth market
3. To increase usage of the existing products by customers
4. To restructure a mature market by pushing out competitions
This strategy will enable the organization to have good information about its competitors and what their customers need.
This growth strategy refers to when an organization seeks to sell its already existing products into new markets. This strategy involves the following approaches:
– New geographical markets
– New product dimensions like packaging
– New distribution channels
– Different pricing policies to create new market segments
This strategy is different from market penetration since you target new and unknown markets. It helps an organization to try new markets and increase its market share.
This strategy aims at introducing new products into already existing markets. The organization may require to develop new competencies and modify its products to appeal to the existing markets. This strategy is suitable where the product needs to modified or differentiated in order for it to maintain a competitive edge. This strategy involves the following:
This strategy helps the organization to understand its ability to meet the demands and the needs of its markets.
This growth strategy involves marketing new products in new markets. This strategy requires caution as the organization will be entering into new markets with no experience or knowledge about the markets. Therefore, the organization needs to have a clear and honest assessment of the risks and what it expects to gain from the new markets. If the gains are more than the risks, then it can go ahead and implement this growth strategy. With the right balance between the risks and the rewards, this strategy can be very rewarding.
The use of product/market strategy in strategic planning can help an organization to spot opportunities, maintain its market share, expand to other markets and enhance efficiency.