5 Models That All Marketers Should Understand
Fundamental theories to improve decision-making in business.
Really smart people who work at universities and stuff come up with theories and frameworks that help us to better understand how things work. Business is no different.
So as a business owner or marketer — if we know and understand these theories on the underlying processes behind how business works and how customers behave, the more objective we can be with our decision-making.
Meaning we have a better chance of success.
This article explores five theories and models that all business owners and marketers should understand.
The Ansoff Matrix
The first theory is the Ansoff Matrix, a popular framework for decision-making about growth and expansion strategies. H. Igor Ansoff developed the framework, published by the Harvard Business Review in 1957.
The matrix is called the Product/Market Expansion Grid.
Ansoff’s thoughts were that firms must continuously grow and change to create a competitive advantage.
“Growth is essential to run a business for profit and, to study the growth, Ansoff Matrix is a planning technique used for deliberate judgment about firm growth through product and market extension networks.” (Hussain, Khattak, Rizwan, & Latif, 2013)
There are four components of the matrix:
- market penetration
- market development
- product development
By analysing their market through the matrix, firms can identify strategic alternatives to accomplish their growth objectives and analyse their risk.
Of the four strategies, market penetration hosts the least risk and diversification the most.