The product market matrix asks two questions about every growth idea: is the product new, and is the market new? The answers place it in one of four quadrants with a different level of risk.
- Market penetration
- Sell more of what you already offer to the customers you already serve. Lowest risk: you know the product and the buyer.
- Product development
- Build new products for the customers you already serve. Moderate risk: you know the buyer but must build and prove the product.
- Market development
- Take what you already offer to new customers, segments, or regions. Moderate risk: the product is proven but the buyer is not.
- Diversification
- Build new products for new markets, a step away from your core business. Highest risk: both the product and the buyer are unproven.