Distinguish between market penetration and market development
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Key Difference – Market Penetration vs Market Development
Market penetration and market development are two quadrants in the Ansoff’s growth matrix developed by H. Igor Ansoff in 1957, the other two being product development and diversification. Ansoff’s growth matrix demonstrates 4 ways in which a company can expand and grow. The key difference between market penetration and market developments is that market penetration is a strategy in which the company sells existing products in the existing market in order to obtain more market share whereas market development is a strategy in which the company sells existing products in a new market.
Market penetration and market development are two quadrants in the Ansoff’s growth matrix developed by H. Igor Ansoff in 1957, the other two being product development and diversification. Ansoff’s growth matrix demonstrates 4 ways in which a company can expand and grow. The key difference between market penetration and market developments is that market penetration is a strategy in which the company sells existing products in the existing market in order to obtain more market share whereas market development is a strategy in which the company sells existing products in a new market.
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Market development and market penetration were two of four distinct company growth strategies identified by Igor Ansoff in a 1957 "Harvard Business Review" article. Product development and product diversification were the other two. Market development is the use of an existing product or service offering to attract new customer market, whereas market penetration is an effort to dig deeper within an existing marketplace.
Market Penetration Opportunities
Market penetration is the least risky of the four growth strategies, according to the Quick MBA website. It involves additional marketing or more assertive sales efforts to penetrate more deeply into an existing customer base. Increased market share is a common marketing objective of companies using this strategy. Adding more convenient business locations or remote locations may also help you access more customers in the existing market
Market Development Opportunities
Companies often brainstorm multiple target market segments when developing a marketing plan. The first segments targeted with advertising are the ones you feel provide the best potential for profitability. As long as you have other potential markets, you can grow through market development. This is especially true when competitors haven't already targeted the new potential market. You could add stores in new geographic regions with little to no competition. A catalog retailer could buy a third-party mailing list targeting new customer types to develop beyond its existing customer mailing list.
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