In 1957, Igor Ansoff developed certain strategic marketing tools for the successful functioning of business. These strategies commonly called as Ansoffs Matrix, encompass four main concepts that is Market Penetration, Product Development, Market Development, and Diversification.
Market Penetration is one of the lowest risk strategies in marketing. The purpose of market penetration is to increase the sales of an existing product through strong promotional activities or by reducing prices for increased sales.
Business often introduces new product in to existing markets, with the perception that it can be marketed among existing customer groups. Product development is a medium risk strategy where the business is known with the target market, which can add to the success of a business.
In marketing development strategy, firms look for new markets to market their existing products. This process is done only after evaluating characteristics of new markets and target customers.
Diversification is the process of selling new products to new markets. This high risk marketing strategy has the potential to produce better rewards, provided the product can satisfy the needs and wants of target customers.