Introduction

Experian is a credit reference agency. It holds details on consumers' credit ratings and makes them available to businesses such as banks and credit card issuers who need such information. Most of its customers are therefore other businesses that pay a fee each time they search Experian's records. Consumers can see their own credit records for a £2 fee. Experian has developed a new product, called CreditExpert, for consumers.

Diversification

Igor Ansoff, a business expert, showed the ways in which businesses can expand on a grid. They could develop:

• existing products in existing markets. This is called market penetration and involves increasing the market share of the business
• new products in an existing market. This is called product development. In Experian's case this would involve expanding their business-to-business products
• existing products in new markets. This is called market development. Experian has expanded into over 60 countries worldwide
• new products in new markets. This is called diversification. CreditExpert is an example. This is the highest risk strategy needing new skills and techniques.

The market

CreditExpert is a new product that allows consumers to access their personal credit reports online, rather than by post. Consumers need this service to be able to check that their credit details are accurate. The new product allows consumers to monitor creditworthiness online and, in particular, helps to check that they have not been victims of identity fraud. This is a serious problem in the UK, involving a criminal applying for credit in someone else's name. CreditExpert updates subscribers with a text or email every time there is a significant change on their report. They can then get immediate help from Experian's 'Victims of Fraud' team if they suspect they have been made a victim.

Market segmentation

This means to divide a market into segments that can be targeted. Once segmented, the business targets the appropriate segment and positions the product so that it appeals to that segment. Markets are divided by factors such as age, gender and income. For Experian it was important to target internet users who were keen to manage their credit. A marketing mix was then developed to reach this group.

Marketing Mix

The marketing mix consists of four areas. It is important to have a good balance between these when developing a marketing strategy. They are

• product - the new service gives up-to-date credit information online and alerts customers to changes in their report
• price - the price, after a 30-day free trial, was set at £5.99
• place - the development was made possible by the growth in e-commerce, allowing it to be delivered over the net – a new channel of distribution
• promotion - Experian used its high profile to help promote the product. It also built on the dangers of identity fraud.

Conclusion

Modern technology has allowed Experian to introduce an exciting new product in a world increasingly dependent on credit. As a new product in a new market, it is an example of successful diversification.