Page 17 - Life Insurance Today May 2016

original work, which did not use the matrix form, Igor
Ansoff stressed that the diversification strategy stood apart
from the other three.

While the latter are usually followed with the same
technical, financial, and merchandising resources which
are used for the original product line, diversification
usually requires new skills, new techniques, and new
facilities. As a result it almost invariably leads to physical
and organizational changes in the structure of the business
which represent a distinct break with past business
experience.

For this reason, most marketing activity revolves around pricing strategy designed to make the market
penetration; and the Ansoff Matrix, despite its fame, is unattractive for competitors.
usually of limited value - although it does always offer a
useful reminder of the options which are open. Ansoff's 4. Increase usage by existing customers - for example by
product/market growth matrix suggests that a business' introducing loyalty schemes.
attempts to grow depend on whether it markets new or
existing products in new or existing markets. The output A market penetration marketing strategy is about
from the Ansoff's product/market matrix is a series of "business as usual". The business is focusing on markets
suggested growth strategies that set the direction for the and products it knows well. It is likely to have good
business strategy. These are described below: information on competitors and on customer needs. It is
unlikely, therefore, that this strategy will require much
3.2.1. Market penetration (existing markets, investment in new market research.
existing products):
Here we market our existing products to our existing
This involves increasing sales of an existing product and customers. This means increasing our revenue by, for
penetrating the market further by either promoting the example, promoting the product, repositioning the brand,
product heavily or reducing prices to increase sales. and so on. However, the product is not altered and we do
Market penetration is the name given to a growth strategy not seek any new customers.
where the business focuses on selling existing products
into existing markets. For Quadrant I - the strategy for market penetration is by
selling more of the same product to the current market,
Market penetration seeks to achieve four main It means that agents should approach again and again to
objectives: their existing customers as the same customers can give
1. Maintain or increase the market share of current more business since it is five times more costly to get a
new customer than it is to sell to an existing one.
products - this can be achieved by a combination of
competitive pricing strategies, advertising, sales Also, the customer has already bought products from you,
promotion and perhaps more resources dedicated to so there is no need for the agent, to sell the services or
personal selling. sell oneself before selling the products. But in case of a
new customer, the agent has to first sell him/herself at
2. Secure dominance of growth markets - asking for the their first impression and then sell the product.
feedback of the products, acceptance.
The existing customers' situation may have changed. For
3. Restructure a mature market by driving out example, his/her income may have increased, his/her
competitors - this would require a much more
aggressive promotional campaign, supported by a

I learned that you can be successful if you get people to help you become successful.

Life Insurance Today May 2016 17