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Product-Market Matrix Strategy
The product/market opportunity matrix identifies four alternative marketing strategies that may be used to maintain and/or increase sales of business units and products: market penetration, market development, product development, and diversification. The choice of an alternative depends on the level of market saturation by the SBU (strategic business unit) or product and the firm's ability to introduce new products. Two or more of these alternatives may be combined.

Market penetration is effective for SBUs when the market is growing or not yet saturated. A firm seeks to expand the sales of its present products in its present markets through more intensive distribution, aggressive promotion, and competitive pricing. Sales are increased by attracting nonusers and competitors' customers and raising the usage rate among current customers.

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Market development is effective when a local or regional business looks to wider its market, new market segments are emerging due to changes in consumer life-style; and demographics, and innovative uses are discovered for a mature product. A firm seeks greater sales of present products from new markets or new product uses. It car enter new geographic markets, appeal to market segments it is not yet satisfying, and reposition existing products. New distribution methods may be tried; promotion efforts are more descriptive.

Product development is effective when an SBU has a core of strong brands and E sizable consumer following. A firm develops new or modified products to appeal to present markets. It emphasizes new models, quality improvements, and other minor innovations closely related to established products and markets them to customers who are loyal to the company and its brands. Traditional distribution methods art used; and promotion stresses that the new product is made by a well-established firm.

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Diversification is utilized so that an organization does not become overly dependent on one SBU or product line. A firm becomes involved with new products aimed at new markets. These products may be new to the industry or new only to the company Distribution and promotion orientations are both different from those traditionally followed by the firm.

Source of Reference:
Arthur Thompson and Strickland, Strategic Management: Concepts and Cases, McGraw Hill. You can obtain this excellent book here

Indonesian version of strategy article like this can also be seen at www.StrategiManajemen.net