The Ansoff Matrix explained

Marketing Models Explained

In our second article in this series of explainers for marketing and business models we turn our attention to the Ansoff Matrix.


The Ansoff Matrix

This model was developed in the late 1950s by a US-based Russian Professor, H. Igor Ansoff. He was a mathematician, researcher and expert in strategic business management. This particular model is still used widely today and is a staple of management and MBA courses.

The model helps businesses focus on the four key options for growth going from the safest (top left quadrant in the illustration used here) to most riskiest (bottom right quadrant). It tells a business to look at four strategies and use some combination of some or all of them to help them grow over whatever timeframe they’re considering.

The first dimension to set out on the horizontal axis are your products or services moving from things you currently do to new ones. The second dimension on the vertical axis is your customers / markets or audience again going from your current ones to new ones. So, that gives us four potential strategies to investigate in order to grow the business – a Market Penetration strategy (the safest), a Product Development strategy, a Market Development strategy and a Diversification strategy (the riskiest one).


Market Penetration Strategy

In essence, how to sell more of what you do to your current customer base, the audience that you know the best. This is the easiest strategy to adopt as it involves an audience you already know well and a product or service you already produce. When exploring this look at things such as:

• Reducing the time between re-orders

• Increasing the average order value

• Increase or change your opening hours

• Increasing consumption rates of your product

Many online businesses, for example, offer up additional related products to shoppers in order to increase cart values.


Product Development Strategy

How to develop your existing products or services to offer new ones or vacations on existing ones, often to your current customer base. First of all, think through your product or strategy line carefully by asking yourself these four questions in this order:

• How can I improve or augment the current product / service offer?

• What do market conditions suggest I do?

• Do I have customer feedback to help me?

• What opportunities exist for research and development?

Even though this is a riskier strategy than market penetration there are still scales of risk within it. So, before thinking about offering something totally new first consider if your product can be made cheaper or locally (reducing shipping costs), can you improve its quality or change the packaging? There are a lot of things that you can do to improve your current offer before you add to it with totally new products.


Market Development Strategy

How to move into new markets with existing products or services. So, even though your keeping your current product or service offer you’re now considering moving into new markets. As these are outside of your direct control, this is for me somewhat riskier than a product development strategy.

A new market doesn’t necessarily mean a new geographic location, it could be a new audience as defined by some combination of age, gender, income, education, household size, business type and so on. Or you could consider life stages – new parents, retirees, new businesses under 3 years old, etc. A different business sector perhaps – manufacturing, retail, services or business size. Finally, there may be new audiences that seek a different mix of benefits from your offer from those your current audience wants.


Diversification Strategy

How to move into new markets with new products or services. This is the riskiest as your necessarily dealing with new markets and new products or services, both of which you have poor or very limited direct experience with. This strategy isn’t solely about buying or starting another business or a multi-site operation, you could diversify by investing up or down your current value or supply chain. For example, look at your warehouse or shipping suppliers or the retailers that sell what you do, if you’re a step or two removed from the final consumer.

One thing to remember about these strategies is that they’re not necessarily meant to be taken as an either or approach. Younger businesses may want to focus on only adopting one or two strategies, most probably market penetration followed by product development. More mature businesses could consider some mix of all four. We’ve worked with a number of businesses in the Salisbury and wider Wiltshire and Hampshire areas using this very model. So if you’d like help in developing some growth strategies give us a call, we’re here to help.

For further info on how we use SOSTAC click on the link or, for more detailed explanations on models and for training, please check out Smart Insights who are responsible for the illustration accompanying this article.

Find out more about the people behind An.X.

The 7Ps marketing model

Marketing Models Explained

In the first of a series of short explanatories of the various models we use to analyse a business or a marketing plan, we’re going to look at the most commonly known one…

The 7Ps of the Marketing Mix

The marketing mix, defined by these 7Ps, are the variables in a business that a marketer can manipulate to ensure the optimum balance of supply and demand. It’s really just a series of business decisions that need to be evaluated and made periodically.

When this model was first developed in 1964 it consisted of only 4Ps – namely Product, Price, Place, Promotion. This remained the basic approach until 1981 when it was extended to cover the intangible elements in service businesses – Participants, Physical Evidence and Processes. Sometime later, Participants became People.

The goal here is to ensure you are marketing the right product to the right person at the right price in the right place at the right time.

Today, as competitive advantage is harder to deliver on product alone, the focus has shifted for all sectors on to the other elements. Differentiation can rarely be achieved on the features of your product or service. Always review each of these to see where adjustments can or need to be made to ensure you remain competitive. The more mature a company is the more of these 7Ps that your marketing people should be involved in setting.


This covers things like quality, image, brand, features, support, customer service, availability and warranties.


Marketing promotions, word of mouth, sale promotion, PR, branding, direct marketing.


Includes positioning, discounts, credit, payment options, value added.


Trade channels, sales support, distribution.


Anyone involved in your marketing activities or with customer contact. Your recruitment and company culture policies, training and staff remuneration.


Research and development, customer focus, IT support. Your order and delivery systems and your customers’ experience of them.

Physical Evidence

Your staff’s experience of your brand, packaging, online experience, social validation (reviews). It also covers the image your business portrays through its premises, vehicles and staff appearance.

We’ve applied this process to many companies in the Salisbury and wider Wiltshire areas; so if you’d like help in understanding how to differentiate your business from your competitors give us a call, we’re here to help.

For further info on how we use SOSTAC check out Smart Insights.

Find out more about the people at An.X.

7 step guide to a strategic growth plan

Seven steps to a solid strategic growth plan

Statistics show that roughly 50% of new businesses don’t make it past their third year. This is often down to a number of factors, but if you’ve survived past the tricky first year when around 80% fail, then you do need a plan to carry you through the next period. One key way to help your business stay afloat is to plan, specifically plan for growth. Here is a quick summary of the things you need to look at in a strategic growth plan.

1. Establish a value proposition

What makes you different? Ask your customers why they buy from you. You should be able to produce a list of no more than 5 reasons why. AND… be able to weight them. Reason 1 may be 60% of the decision to buy from you. Reason 2 only 10% and so on. Give yourself a score out of 10 for each reason and use that to multiply the percentage weight. So, if reason 1 is 60% why they buy and you score yourself an 8 in this your total for that would be 60 x 8 = 480. Add them all up and you have a total. You can do the same for your competitors to see where you sit amongst them. That, in turn, can give you insight into what you do best and worst and start writing up you value proposition around that. There’s no point telling people your the best at X if X is only 10% of why they buy from you. If you have a large enough and complex business then you’re going to need to think about segmenting your audience. Each segment might the same five reasons to buy but the weighting may be different per segment or they may even have one or two reasons that differ. In general, try not to position yourself on price as once you start talking about being the cheapest or lowest cost there’s only one way you can go and that’s down. There are exceptions to this rule of thumb but it’s better to avoid a price-based position.

2. Identify your ideal customer

Speaking of your customer base, you’re here to solve problems they have. So, identify the common defining characteristics of the ideal customer. Build a profile of who they are. There are loads of tools online to help you write down a customer persona. Again, if you have a diverse audience base you will need to segment it and create a persona for each segment. You may find this article helpful, with thanks to Hubspot

3. Define your key growth indicators.

In order to determine if your business is growing or shrinking you need to measure. But what? Pick the five key things that you can accurately track over time and don’t just think in terms of sales and turnover. There’s market share, customer acquisition or retention, life time value per customer, and more.

4. Identify your revenue streams

What are your current revenue streams? Can you add any more and, if so, are they sustainable in the long run? Before adding new products or services or seeking a new audience, ensure that you’ve done your utmost to penetrate the markets and audiences you currently sell to with the products or services you currently offer. This is the least risky strategy to explore before you move on to other potential revenue streams.

5. Know your competitors

Even if you’re the runaway market leader (unlikely) there will be something you can learn from your competitors. Again, pick the 5 key ones that sell the most similar products or services to the most similar markets. These are your direct competitors. Are they growing? If so, how and why? Is their positioning (their value proposition) different? Are their processes tighter so they can produce at a lower cost? They will certainly have made some choices you chose not to or weren’t aware of. Don’t assume you made the right ones. Ask around – at industry events or grill any suppliers or customers you share.

6. Play to your strengths

If you followed Steps 1 and 5, you should be able to produce a simple grid for yourselves and your competition where you rate yours and their performance out of 10 for each the 5 reasons customers buy and then multiply that rating by the weighting percentage. E.g. Customer service was given a 35% weighting. You score 8 out of 10 and competitor A scores a 6. So, your weighted score would be 8 x 35 = 280 and competitor A would be 210. Conversely, you scored 2 out of 10 on Authority but competitor A scored a 9 BUT this reason was only 5% of the reason customers buy. Your weighted score would be 10 and competitor A would be 45. So, it pays to focus on your strengths first before spending time working on your weaknesses. In the example above, you have the most potential for improvement in the area of establishing Authority but, as it’s such given such a low prominence in the decision making process for your customer it’s a lot of effort for a low reward. You wouldn’t have stayed in business this long if there aren’t at least two of the five reasons that you score well in and are given a high priority by your customers. Focus on improving these to a point where you can’t get any better before trying to change your weaknesses.

7. Invest in people

Your staff are the ones with the most frequent contact with your customers so make sure they’re happy. They need to be inspired and motivated by your company’s value proposition. Cut back on the premises, the furniture, and the other fixed overheads before you consider being frugal with people. The best ones, that you’ve treated well, will even stick with you if you need to cut back on their remuneration package in a tough period.

Once you have all this in place, don’t park it on a shelf and forget about it. Ensure you’re continually reviewing all its parts as businesses and markets change over time. Make sure you’re following the right growth strategy and measuring the impact of any changes you make to your plan.

Take a look at some of our Case Studies for more information about the businesses in Salisbury or Wiltshire or Hampshire that we’ve helped or Contact Us for help with your own planning.

Find out more about the people behind An.X.

5 tools to use for competitor research

Competitive analysis

Do you know your competition? Here at An.X Ltd. we want to help you understand what your competitors are doing and how they market themselves as this is a key part of developing a marketing strategy. We work with a lot of Salisbury businesses to develop a new or refine an existing marketing plan. The framework we use for client planning is based on SOSTAC, a system created by PR Smith. The very first thing you do when applying this framework is to establish where you are right now with a situation analysis, which involves a competitor review. Here are some helpful tips on how to research your competitors and some helpful Marketing tips.

So, how do you find out what they’re doing? Thankfully, it’s never been easier to check out the market.

First: The Basics

You should always start with their website(s). What information do they provide there? Do they describe customers, partners, channels, organisation structure, office locations? How about how they talk about themselves and their advantages, as they see them?

Once you’ve picked clean the site, blogs, and any other marketing material produced by them directly its time to move on to broader web-based services. There’s a great utility called the Wayback Machine (or Internet Archive) that snapshots sites – they have over 284 billion web pages archived. You can use it to see how a competitor’s site has changed over time. Enabling you to see how their positioning, product offers and so on have developed in that timeframe.

Second: Using Free Online Resources

  1. LinkedIn
    This should be your go-to site for corporate info. With a little digging you can create a decent picture of the organisation of a business, who do what and how many reports they have. It’s even easier to simply follow a business to see when they post to their company pages and what their other followers are saying in the comments section. The free version seems to be adequate for most business users.
  2. Their social media channels
    What do they say about themselves? How many followers and retweets do they have? Who follows them and what do they say about the company? How interactive are they with their followers, and how quickly do they respond to conversations or enquiries? Are they posting the same content across all social media platforms, if so they are not targeting the relevant audiences?
  3. SEM Rush
    How about finding all the important keywords they’re targeting? This is the tool for that. It’ll even show you which ones perform better or worse for them, allowing you to shape your own copy.
  4. Similar Web
    This is a good place to see what overall strategies your competition are using. You can see referring sites, search traffic, display ads and so on. Although often only estimates, you can see monthly traffic too. Comparing that to your own site’s stats can give you a point of reference for scale, even from estimates. It’s a Freemium site, so you can access limited data before you pay for a subscription, even then, its pretty good – 5 results per metric, 3 month’s history of web traffic, etc.
  5.  Spyfu
    Another Freemium site which will help know your competition, this is where you can track competitor’s most profitable ads and keywords. Their AdHistory tool even shows you what those ads look or looked like and how successful they were at generating traffic.

There are more that I hear mentioned but I haven’t used personally. From those, you might want to check out Social Mention, Quick Sprout, Monitor Backlinks and too.

I hope that these helpful tips can benefit your business, sometimes it’s difficult to know where to start to research your competitors.


We would love your feedback on whether you have tried these out and how they have worked for your business, we’re always open for other suggestions that we may not be utilising ourselves. Please feel free to contact us or read more of about our marketing services.