In developing the new product KitKat Oat Bar, Nestle is said to be involved in the fourth quadrant in the Ansoff Model, which is diversification. In diversification an organization tries to grow its market share by introducing new offerings in new markets. It is the most risky strategy because both product and market development is required.
There are 2 types of diversification:
(i) Related Diversification
(ii) Unrelated Diversification
In our case here, KitKat Oat Bar is considered a new product because it is no longer just plain chocolate bar but more to a healthy snack like granola or energy bar. It also ventures into a brand new market where health is the main issue. The target consumers are no longer limited to those who are simply looking for a snack but also those who are leading healthy lifestyles.
Our new product is considered a related diversification as it involves the production of a new category of goods that complements the existing portfolio, in order to penetrate a new but related market. The old market the company caters to is saturated and therefore the company needs to venture into a new market to expand its size and increase its sales.
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