Friday, 26 October 2018

Market Penetration

What is Market Penetration?

Market penetration is a strategy for promoting company growth by increasing sales of an existing product or a new product by advertising, bundling, discounts, etc. It is a technique of increasing the market share of a product. Generally, this strategy is used by a company when it decides to enter a new market. Market penetration also a measure of a product's sales volume relative to the total share of the market of the product.

For example, there are 1.32 billion of 337 million of those people have smartphones, then the market penetration of smartphone would be 25%. In theory 983 million more potential customers for smartphones which may be a good sign of growth for smartphones.

Market penetration is important for every new company or existing company, market penetration is the first step towards business growth.
market penetration
Credit pexels

Market penetration Tactics

There are some tactics or strategy for market penetration.

1. Price Adjustment: 

The strategy of price Adjustment is one of the most frequently use market penetration tactics. In this tactics, the price of the product or services is offered at prices that are lower than the competitor's price to attract potential customers. Walmart and bigbazar attract customer by promoting to sell the things cheaply. This tactic may not work for every market, so you must have to know your industry. If you drop the price then your margins will also drop thus, sometimes price adjustment will also affect the brand and positioning.

2. Increased Promotion:

 Increase in the promotion of a product can lead to a huge result. Advertising campaigns are the most widely used tactics to increase promotion you can also offer trade discounts, sales promotion discount to promote your brand or product.

3.Increase reach:

Rather than compete with existing business, you can capture the market by increasing reach, you can open new distribution channels, and attract people to do business with you. You can also reach new customer through telemarketing, e-mail marketing, digital marketing etc.

4.Product Improvement: 

If you can improve your product quality that stands out from the competition, then your product will increase market share automatically. so, periodically updating your product slight adjustment with its packaging lead to more sales of that product.

By implementing these tactics in your business can create entry barriers for other, by improving to new technology and distinct processes can minimize your cost so, you can boost sales and create an entry barrier.

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