5 Fantastic Market Penetration Examples

How much business is your business actually creating? The answer to this question lies with the amount of market penetration that you’ve been able to achieve. Sometimes referred to as the market share, market penetration is a simple measurement of your sales volume within a specific market category. If you earn $8 of every $100 that is sold in your category, then you would have an 8% market penetration.

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To make more money, you need to have a market penetration strategy. Here are a few examples that can help you to bring the competition’s customers over to your front door.

1. Adjusting Price

The most common method of obtaining a deeper market penetration is to change the pricing structure of the products or services in question. The goal is simple: to bring in more customers because the prices are cheaper than the competition. You sacrifice short-term profits for long-term relationships. Over time, then you begin to raise prices to make them competitive with the competition once again.

The problem with lowering prices to undercut the competition is that the competition can do the same thing to you. Pretty soon no one is making money, but the customers are loving it because they don’t have to pay as much for what they need or want.

Sometimes the reverse is also used. A company may raise prices instead of lowering them so that more revenues come in per item to generate a bigger overall market share percentage. The biggest problem here is that it can become very easy to price oneself out of the existing marketplace.

2. More Promotion

Sometimes the reason why a company doesn’t have a very big market share is because people just don’t know about what a company has to offer. When this happens, a marketing or advertising campaign may be used to increase market penetration. Promotions can take on a number of different forms: sales, contests, or segment specific offers are all ways that a bigger market share can be obtained. Many promotions are short-lived and encourage customers to come back later to purchase at a full price because they’ve been able to experience the value of the product first-hand.

3. Enhanced Distribution

Customer segments may love the product. They may be wanting to purchase the product in droves. Without the right distribution channels in place, however, the levels of market penetration that could be achieved can never be fully realized. A company that may sell from a storefront only might choose to create an e-commerce site where they could ship their products around the world. Direct mail companies might choose to include telemarketing as a way to increase their market penetration. An online only company might open up a physical store.

The key to making this example work is that the new distribution strategy to the targeted customer segments must be completely different. If Amazon were to open up another website that sold the same things, they would just be dividing their customer base. On the other hand, if Amazon began to open up stores in local malls around the world, they could reach more customers more frequently.

4. Improved Goods or Services

If an offer is beginning to stall out or the products are beginning to become stale, then improving the offer can renew the levels of excitement for it and increase the overall market penetration. You’ll see this method used in grocery stores all the time today.

  • 20% more than our standard 8 ounce box.
  • New and improved flavors.
  • A better recipe.

The goal is simple: get customers who have left for different products to come back and try the item once again. Sometimes the product itself doesn’t have to be altered to bring about the perception of improvement. A better product design can make an item more attractive. Rebranding can create excitement. By creating more appeal, the perception of improvement is sometimes just as valuable as a real improvement.

5. Comparisons

If you need to stand out from your competition in order to increase your market penetration, then a direct comparison makes a lot of sense. Compare your goods or services to those of the competition Show the customer base why what you’ve got is better than what the competition has. When all things are equal, your personality and how you deliver a product can be the one small change that is necessary to give you the competitive edge.

Having a deeper market penetration means having the chance to earn more revenues every year. Use these examples to improve your market share and you may be surprised at how many of your customer segments want to experience what you have.

Market Segments Breakdown