Ronald Donaldson Marketing Systems Overview

MARKETING TACTICS & THE ANSOFF MATRIX

(What IT Professionals Can Learn About Marketing Tools)

It is well known that certain tools, or models exist, which aid in marketing tactics and development strategy within large organizations. In particular, we are here concerned with IT centered companies, and with the utility of such tools to their IT professionals. What role do these directional tools play for those in IT positions, and what, if anything should be learned from them? I will be using the veteran model of developmental strategy first proposed by Igor Ansoff in 1957 known as the Ansoff Matrix. (Tutor2u*, 2009). According to the Ansoff Matrix, corporate growth falls into one of two dimensions, products or markets, and of those two dimensions exist four basic strategies, market penetration/development, and product development/diversification. Being as the Microsoft Corporation has been a perpetual presence in the realm of IT solutions virtually from the beginning, it will serve as an adequate point of reference when applying and exploring the concepts of the Ansoff Matrix and of considering what utility might there be found relating to IT professionals.

But before I go into that, Id just like to explore the basic utility of development tools a bit. On this level, marketing development tools can be considered universal in that they may be applied with like effectiveness to any branch of development. It doesnt matter whether the product is a computer application or a new style of running shoes; the basic concepts of growth are the same. In each case the devil will appear in the details. So to that effect, such tools will naturally involve the IT dept. respectively.

Ansoff Applied
(The Matrix Within Microsoft)
To begin this section, I must first of all state that I have no way of truly knowing whether or not the marketing team at Microsoft has applied the Ansoff Matrix. What I can be sure of however is that the components of strategy, which the Matrix is intended to manipulate, are basically universal throughout any development or growth venture. So while I cannot be sure that it was in fact the Ansoff Matrix that was used to develop their overall strategy, I do know that the elements of strategy they have used can be recognized within, and categorized along the lines of it. Examples are as follows:

Marketing Penetration- An element of marketing tactics whereby

a distributor of goods and services attempts to gain control of the market with existing products and clients. It can clearly be observed that every extent has been reached in Microsofts efforts to control the market in this manor. They have achieved an unparalleled level of success in this by developing products that set the standard for the average user. Catchy add campaigns and household recognition of usability have helped pave the way for this corporate giant. There is a growing number who have turned their backs on the firm grasp MS has held over the market for some time however, and as a result, more user-friendly, affordable, and available programs are being developed everywhere. Minimal risk. Market Development- An element of marketing tactics whereby a

distributor of goods and services seeks to expand client base of a product. This entails selling a product to new people, in new locations. Since the

very dawn of personal computing, Microsoft has at least to some degree exemplified this tactic. When the computer nerd market became saturated, which was a relatively short time after PCs were introduced, the goal quickly became making it a household object, both widely available and usable by an increasing base of users. MS has been extremely successful in this endeavor since the establishment of its first international sales office in Japan in 1979, and subsequently, its first million dollars. (Microsoft, 2008). Further innovations and distribution of goods and

services established the MS organism early on as a world-wide authority in computer technology. Slightly increased risk. Product Development- An element of marketing tactics whereby a

provider of goods and services attempts to gain market share by introducing new products. MS has continuously, since the mid 70s been able to produce new products, either by elaborating existing ideas or direct by innovation. In either case, they have been successful in offering at least one product for virtually every known application to date. In their efforts to produce and distribute more products, MS has countless products available, both hardware and software, which continue to flood the technology market. One recent development at MS was revealed early this year, (Smith, N. 2009). that MS would soon be merging the SharePoint and PerformancePoint capabilities into one application in an effort to extend the two applications capabilities to an existing client base. MS is in a good position to manipulate the technology market in a similar manor.

Diversification- An element of marketing tactics whereby a

distributor of goods and services attempts to gain market share by implementing both product and market development. The riskiest cell of the Ansoff Matrix, and potentially the most rewarding. New inventions that serve a purpose that no previous item before has accomplished, vaguely fall into this category. For an established corporation such as Microsoft, not only the new product, typically aimed at those with technological needs must be developed, but as well, a product that is targeted for clients existing outside the current user base as well. Does this imply that MS must develop a product that does not fall into the technology category? Not necessarily. We can assume that whatever they produce will relate in some manor to a computer, but something completely new, which would entail more than the typical user is needed. A good example of this is MS Surface, a technology that promises touch sensitive computing to everyone. Not only does the potential utility of this product carry over from previous MS technology, but speaks as well to children and the elderly and disabled. MS Surface aims to bring usability to a bold new level, and by doing so expand their potential user base to a new level as well. The history of technology is full of products that might fall into the diversification classification cell, and along with other biometrically interactive technologies like voice recognition, are opening doors to new areas of application and usability. (MS Surface, 2009)

Marketing & IT
One thing I find very interesting is how the cells in the Ansoff Matrix overlap and involve one another. For instance, market penetration is accomplished by market development, but its probably a good Idea to start with penetration. Likewise, are the cells of product development and diversification interdependent. You really cant do one without to some degree doing the other. And while were on the subject of interdependencies, consider the elemental departments of an organization. You have corporate management, book keeping, sales, and IT among many others. No one department typically can be omitted from the operation, so its safe then to say that the concerns of one department ultimately are the concerns of another. In this sense, it is easy to see how IT professionals might be concerned and involved with marketing tools like the one above. After all, it is up to that department to push the envelope of capability and development for products in which it is involved and responsible for, is it not?

IT professionals therefore, are involved with, and can learn a lot from marketing tools like the Ansoff Matrix. A directional guide to development can be ascertained here. Not only does it become clear through marketing tactics, what the larger picture and goals of the corporation are, but also, the process by which a product becomes dominant in the market, and how technology itself evolves in accordance with the market may be observed. Whether its an IT corporation, or a corporation having within it smaller technological elements, IT professionals are able to gain insight into the agenda they themselves are serving. And depending on the application of technology, thereby better equip themselves to advance the companies interests and their own.

It is important for IT professionals to acknowledge the particular marketing tools or tactics that the organizations in which they are employed tend to adopt. IT has literally permeated every venue of business operations there is. From management to production and marketing, to various degrees, the IT department is found ever present, lurking in the background and assuring the functionality of the companies technology. The point is, IT people are inseparable from the life of the company. They are intimately involved with the steps an organization takes in any particular direction and must therefore be weary of what methods are used to determine what steps to take.

Conclusions
Marketing tools like the Ansoff Matrix prove an interesting and practical subject matter for consideration. From day one of a corporations existence, the principles exemplified in the Ansoff Matrix can be observed in a very practical, if not general sense. I think IT professionals, particularly in a High Tech company like Microsoft, are virtually inseparable from the cycles of growth the company will experience. Therefore it is no surprise to find the tools of marketing strategy to be of the utmost interest to IT.

References
Ansoff Matrix. Everything2.com. Retrieved Apr 25th 2009 from, http://www.everything2.com/index.pl?node_id=1359571 Ansoff Matrix. Tutor2u. (2008) Retrieved Apr 25th 2009 from, http://www.tutor2u.net/business/presentations/strategy/ansoff/default.html Microsoft. Product timeline and development history. (2008). Retrieved Apr 25th, 2009 from, http://www.thocp.net/companies/microsoft/microsoft_company.htm Microsoft Blog. Product Innovation. (2009) Retrieved Apr 25th 2009 from, http://blogs.msdn.com/bi/archive/2009/01/23/microsoft-bi-strategyupdate.aspx Microsoft Surface. (2009) Retrieved Apr 25th 2009 from, http://www.microsoft.com/surface/