1. MARKETING PENETRATION-1
Market penetration is the exact percentage of the target market that consumes a
specific productor services. Marketpenetration could also be a stellar measureof
the company's sales percentageof all it’s a productit sells. Companies produce
goods and services for a specific population or with a potential market in mind. In
a broad’s point of view, marketpenetration is the measureof individuals in the
target market who consumesomething versus thosewho actually don’t. For
example, if a company determines a productnamed XYZ which has a marketof 50
million people and of those 10 million have already purchaseit, then product
XYZ's market penetration percentage is 20% (1,00,00,000/5,00,00,000 =0.20).
Market penetration could also be represented as the percentage of a company's
sales versus the total sales for a specific product. For example, if all companies
that produce products similar in nature to XYZ, which have total sales of 5 crores,
and company ABC's sales are equal to 1.5 crores, then company XYZ's market
penetration would be 30% (1.5 crores /5 crores = 0.30). In this series of articles
we will tell you everything you need to know on marketpenetration, and since
this a very vasttopic there will be 3 articles on this.
2. Market penetration for a specific product or serviceindicates higher potential for
the increased sales. The smaller the product's marketpenetration is, the more a
company should invest in its strategies for marketing for that particular item. For
this reason, higher market penetration indicates that a producthas become well
established in the marketand the company is respectively a marketleader.
Here are Market Penetration tactics which will be very usefulfor you:
1.Price Adjustment
The strategy of Price Adjustmentis the most commonly used marketpenetration
tactics by all companies. A market penetration example could be lowering the
price of a productor servicewith the aim of increasing sales is a price adjustment
tactic. Furthermore, the alteration (increaseor decrease) in the price of a product
after analyzing the competitors’ products is also a scenario of price adjustment.
But, in the real sense, this marketing strategy should be used very judiciously as
overdoing it can lead to adverseresults. Like, increasing your price consistently
may makethe customers believe that you are a company of high-profitmotive.
Decreasing the price too often would make them to believe that your products
are of sub-standard quality.
2. Augmentedpromotion
The drastic increasein promotion of a product(or service) can lead to dramatic
results. For example, advertising can be a wonderfultool for increasing brand
awareness. Companies do have a choice of making their campaigns long-termor
short-termwhich depends upon their needs and budget. However, thething to be
considered is that whatever be the size of the campaign, it must be well-planned
and thought-out. An easy counter promotionalcampaign would be simply ruined
by the competitors in this age of the cut-throat competition.
3. DistributionChannels
The strategies of the Distribution Channels which is one of the mostconstructive
market penetration strategies. This strategy typically involves opening of new
distribution channels by focusing on a particular distribution channel. For
example, if selling through retail outlets is your primary channel, then you can
learn to gain new channels like telemarketing, e-mail marketing, online
marketing, etc. Such opening of new distribution channels paves the way for
3. more new channels and thus lead to increased market spaceand overall
profitability.
4. Improving Products
Itis true that to really appeal to your customers, you mustimproveyour product
quality. However, sometimes by communicating to them about the better
standard of the productitself can do the trick and no major improvement in the
productmay be needed. This is becausemost consumers areencouraged to buy a
productjustby its appeal and do not necessarily check whether it proves itself or
not. Thus, only by doing slight adjustments with the productand it’s packaging
you can appeal morestrongly and increaseyour sales revenue.
5.Upsurge Usage
A very potent methods of the market penetration that is increased in the usageof
any product or service. If a marketing promotion campaign is effectively delivered
at a specific area, then it would lead to an upsurgein productuse which would
thus lead to better market penetration with the increase in sales figures.
This article has only few essential tips with moreadvises coming up in the
following article, we’vetried to showcaseseveralmarketpenetration strategies.
However, such tactics will be applicable best when you make use of the multiple
ones together. The increasein reach of your productshould be accompanied by a
subsequentincreasein your promotions. After increasing the promotion, you are
bound to grow the productusageand on the other hand, attract competition
fromyour rivals.
