Diversification is a form of growth marketing strategy for a company. It seeks to increase profitability through greater sales volume obtained from new products and new markets.
The product diversification strategy is different from product development in that it involves creating a new customer base, which by definition expands the market potential of the original product. Any modification of a current product that serves to expand the potential market implies that the company is following a strategy of product diversification. Diversification occurs when a business develops a new product or expands into a new market. Often, businesses diversify to manage risk by minimizing potential harm to the business during economic downturns. There are different diversification strategies a company may employ. We'll take a look at some of the primary strategies. Our first strategy is concentric diversification. A company may decide to diversify its activities by expanding into markets or products that are related to its current business. A product diversification strategy is a form of business development. Small businesses that implement the strategy can diversify their product range by modifying existing products or adding new products to the range. Risk. Product diversification is a high risk strategy, so it’s important to assess both the opportunity and the level of risk. Focus on product diversification that represents an attractive opportunity for your business, such as an instance where the market is growing and no other company is meeting the demand. From Wikipedia, the free encyclopedia. Diversification is a corporate strategy to enter into a new market or industry which the business is not currently in, whilst also creating a new product for that new market. Product diversification involves addition of new products to existing products either being manufactured or being marketed. Expansion of the existing product line with related products is one such method adopted by many businesses. Diversification is part of the four main growth strategies defined by Igor Ansoff's Product/Market matrix: Ansoff pointed out that a diversification strategy stands apart from the other three strategies. Product diversification involves addition of new products to existing products either being manufactured or being marketed. Expansion of the existing product line with related products is one such method adopted by many businesses. Marketing Strategy-Market Diversification. Diversification is a form of growth marketing strategy for a company. It seeks to increase profitability through greater sales volume obtained from new products and new markets. Diversification can occur either at the business unit or at the corporate level Diversification as a Marketing Strategy. Grow your business by diversifying into new markets. John Rowley/Photodisc/Getty Images. When you have developed a successful business, your growth is limited by the size of your market. A diversification strategy opens up new possibilities. You can diversify your product offering or your target markets, but you must expand your business horizons. To continue to grow, you have to examine how you can increase sales volume and revenue while keeping costs and risk to a minimum Product diversification–. growing sales of a new product in a new market. Any modification of a current product that serves to expand the potential market implies that the company is following a strategy of product diversification.
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what is marketing diversification