MARKETING DIVERSIFICATION

Diversification is a corporate strategy to enter into a new market or industry which the
business is not currently in, whilst also creating a new product for that Newmarket.

Diversification is a corporate strategy to enter into a new market or industry which the
business is not currently in, whilst also creating a new product for that new market. This is
most risky section of the Ansoff Matrix, as the business has no experience in the new market
and does not know if the product is going to be successful.

Diversification is one of the four main growth strategies defined by Igor Ansoff's
Product/Market matrix:[1]

Ansoff pointed out that a diversification strategy stands apart from the other three strategies.
Whreas, the first three strategies are usually pursued with the same technical, financial, and
merchandising resources used for the original product line, the diversification usually
requires a company to acquire new skills and knowledge in product development as well as
new insights into market behaviour simultaneoulsy. This not only requires the acquisition of
new skills and knowledge, but also requires the company to acquire new resources including
new technologies and new facilities, which exposes the organisation to higher levels of risk

Note: The notion of diversification depends on the subjective interpretation of new market
and new product, which should reflect the perceptions of customers rather than managers.
Indeed, products tend to create or stimulate new markets; new markets promote product
innovation.

Product diversification involves addition of new products to existing products either being
manufactured or being marketed. Expansion of the existing product line with related products
is one such method adopted by many businesses. Adding tooth brushes to tooth paste or tooth
powders or mouthwash under the same brand or under different brands aimed at different
segments is one way of diversification. These are either brand extensions or product
extensions to increase the volume of sales and the number of customers.
 1. WHAT DO U MEAN BY PRODUCT INNOVATION?

Product innovation is defined as:

the development of new products, changes in design of established products, or use of new
materials or components in the manufacture of established products.

Numerous examples of product innovation include introducing new products, enhanced

quality and improving its overall performance. Product innovation, alongside cost-cutting
innovation and process innovation, are three different classifications of innovation which aim
to develop a company's production methods.

Thus product innovation can be divided into two categories of innovation: radical innovation
which aims at developing a new product, and incremental innovation which aims at
improving existing products.

MARKETING POSITIONING?

market positioning. An effort to influence consumer perception of a brand or product

relative to the perception of competing brands or products. Its objective is to occupy a clear,
unique, and advantageous position in the consumer's mind.

2. What Is Positioning in a Marketing Plan?

Positioning is a marketing concept that outlines what a business should do to market its
product or service to its customers. In positioning, the marketing department creates an image
for the product based on its intended audience. This is created through the use of promotion,
price, place and product. The more intense a positioning strategy, typically the more effective
the marketing strategy is for a company. A good positioning strategy elevates the marketing
efforts and helps a buyer move from knowledge of a product or service to its purchase.
Target Market Analysis

The best start for any positioning analysis is gaining a thorough knowledge of a product or
service's target market. This is the group of people or businesses that will best benefit from
the use of the product or service. With a good idea of the wants, needs and interests of a
product or service's target market, a good marketing team can help develop a positioning
statement to help reach as much of the target market as possible.

Positioning in Advertisements

Advertisements are usually the first places businesses position themselves. A cosmetics
marketing department, for example, must determine who they are targeting and what
consumer need is being met. If the intended target is African American teenagers, what type
of need should the cosmetics fill? If the cosmetics line is trying to help teenage girls
overcome acne issues, the person in the ad might be one of a younger African American
physician who teaches girls how to battle acne with the use of these cosmetics. To note the
importance of positioning, this same type of advertisement might not work if the intended
audience of the cosmetics line was older Caucasian women trying to look younger.

Positioning in Sales Locations

Reaching the customer is not simply a matter of advertising, it is also a matter of choosing the
right channels for distribution. If a majority of your target market lives in an urban area with
only public transportation available to them, having your product in rural areas where a
private automobile is needed for transport would not equal sales success. Place or position
your product or service as close to the target market as possible. Create similar
advertisements in store as the ones seen out of store to create an overall identity for your
brand.

Positioning through Price

It should be noted that there is a large amount of research on the psychology of pricing in
marketing. Simply put, the price of an item tells the buyer more about the item than most
realize. Many associate a higher price with higher quality and the opposite with a lower price.
Additionally, if a product is positioned as a good alternative to high-priced brands, the
marketing department must price it in the middle of the market to avoid a comparison to the
cheapest end of the spectrum.

3. PRODUCT MAPPING?
 A product map is a graphic representation of the ways people perceive products, in
terms of underlying attributes, as well as an aid in understanding their preferences.

Composite Product Mapping is a method for

analysing data about respondent perception and
preferences to produce a "product map". A product
map is a graphic representation of the ways people
perceive products, in terms of underlying
attributes, as well as an aid in understanding their
preferences.

We use the term "products" , but this can refer to

any collection of objects, concepts, or other ideas
that can be described in terms of characteristics or
attributes

Our software uses data about people's perceptions

(ratings of products on attributes) and their
preferences (choices among products).

CPM produces a "map" of the "product space". It

shows how the products are perceived by
respondents. Each product occupies a specific
point in the space. Products that are similar are
close together, while those that are very different
are far apart. There can be as many dimensions as
there are fundamental ways in which the products
are seen to differ, but frequently a simple two-
dimensional space will account for most of the
information. The graphic display makes it possible
to visualize brand image information for rapid
intuitive understanding. Such product maps are
useful for understanding product images, customer
desires, and the ways products might be modified
to become more successful. Maps have proven to
be valuable tools in the development of marketing
strategy, as well as in communicating strategic
ideas.
 CPM System is producing maps that use both
perceptual and preference data. The composite
models are two, a "VECTOR MODEL" that
assumes each individual has an ideal direction in
the product space, and an "IDEAL POINT
MODEL" that assumes each individual has an ideal
point in the space. CPM uses perceptual data
consisting of ratings of products on attributes. The
preference data may be either paired-comparison
preference proportions or conjoint part- worths for
products rated. CPM makes three kinds of maps:

Discriminant maps
Composite vector maps
Composite ideal point maps.

With CPMs mapping methods it is possible to

estimate the demand for a new product throughout
the product space, by doing an analysis for each
respondent and aggregating the results. The
computation that is done uses the "First choice"
simulation model. A density of Demand Analysis is
also produced.