Healthcare marketers must strive to proactively monitor their surroundings too, among other things, detect growth opportunities that can be exploited. The long-term viability of hospitals, clinics, home health agencies, and other healthcare entities largely depends on the successful identification and exploitation of growth opportunities. To capitalize on growth opportunities, marketers must carefully formulate appropriate expansion strategies.
Igor Ansoff’s Product-Market expansion grid provides marketers with a very powerful and affecting tool for recognizing and evaluating these opportunities. The product-market expansion grid consists of a vertical axis representing markets (current and new), a horizontal axis representing products (current and new), and four cells that identify the four basic growth alternatives: market penetration, market development, product development, and diversification. This too assists marketers in the development of appropriate expansion strategies.
Market penetration is a growth strategy that seeks to increase the use of current product offerings by current customers. Marketing techniques used to achieve marketing penetration include increased advertising, identification of new uses for products, price reductions, use of incentives and so on.
Market development is a growth strategy that involves the introduction of current products into new markets. Current products may, for example, be placed in different geographic markets or directed toward new demographic segments to stimulate demand and increase growth.
Product development is a growth strategy that involves the introduction of new products into current markets. With this strategy, marketers focus their efforts on developing new goods and services that will be attractive to current customers.
Diversification is a growth strategy that involves the introduction of new products into new markets. By focusing on new products and new markets, this strategy calls for organizations to enter the completely unfamiliar territory. Diversification is the riskiest of the four growth strategies.