One of the fastest ways to grow a business is by increasing its market share.
The more people you have purchasing your products, the higher your revenue will be, it’s as simple as that. And if you want to expand your market share with speed and efficiency, you will have to use a market penetration strategy.
This slightly perverse-sounding term refers to the idea of designing a road-map for your market expansion efforts. Creating a marketing penetration strategy involves defining what your market expansion goals are, and the means you will use to achieve them.
The goal-setting part is relatively straightforward. All you have to do is determine your present market share percentage, and the percentage you want to have in the future.
Things get interesting once you start looking for the means to achieve this goal. There are a variety of market penetration tactics available, and you will have to include a number of them in your strategy.
To help you define your market penetration strategy, we have written a short primer on the topic which you can find in the remainder of this post.
Market Penetration Strategy Basics
Before we start exploring the practical side of market penetration, let’s go over the basic theory first.
Market penetration is defined as the ratio between the sales volume of a product and the total market for that product.
For example, there were 39 million vehicles registered in the UK in 2018. Since the UK has about 66 million citizens, this means that the market penetration for cars is about 59%. This means that car manufacturers have a pool of potential customers the size of 41% of the population.
A market penetration strategy defines the steps for increasing the market share of a product.
For instance, a company that sold 9 million (or 23%) vehicles in the UK might want to increase its market share to 10 million (25%). And they might want to use a combination of marketing and competitive pricing to achieve this goal. This is their market penetration strategy.
Having a high market penetration will confer a variety of benefits to your company.
First, having more customers will allow your company to earn higher profits. Second, having a larger market share will help keep production costs down. Finally, having more market share means your competitors will have less.
It is therefore in the interest of every business to keep its market penetration high. And the way to go about is by implementing a market penetration strategy.
Market Penetration Strategy Ideas
Now that you have a stronger grasp of what market penetration involves, we can start exploring strategy.
There is no one-size-fits-all strategic solution for market penetration. Instead, there are strategic blueprints that you can adapt to your business needs. We will cover a number of these to give you a better idea of what’s available.
This will help you define your own market penetration strategy.
The most straightforward way to expand your market penetration is through advertising.
The more people know about your products, the higher the likelihood that they will buy from you. This strategy is best suited for large corporate enterprises with money to spare.
2. Social Media Marketing
Social media offer a more budget-friendly approach to improving market penetration.
Their outreach potential is massive, and they provide built-in tools for managing marketing campaigns. This makes them perfect for start-ups and other small businesses with tight budgets.
3. Direct Email Outreach
You can also improve your market penetration and grow your customer base with email marketing.
This strategy has the benefit of costing next to nothing to use while offering a substantial ROI. Speaking to potential customers directly also makes it easier to convince them that your product is what they need.
4. Keep The Price Down
Another approach to expanding your market share is by making your products cheaper.
If you offer the same level of services as your competitors but at a lower price, customers will start flocking to you instead. This strategy relies on your ability to keep production costs down thru product research and development.
5. Improve the Existing Product
Instead of making your products cheaper, you can make them better while maintaining the same price.
And once customers realise they’re getting more for the same price, they will seek to do more business with you. Offering a high level of service also means customers will talk more favourably about your company, further increasing your sales potential.
6. Offer Product Bundles
Selling products in a bundle is another effective strategy for improving market penetration.
The bundled item doesn’t have to be similar to the product itself. For example, you can sell a piece of software bundled with an ebook explaining its uses.
7. Expanded Product Usage
Another way to get customers to buy your product is by getting them to use them more.
More product usage means a higher consumption rate, and therefore a higher market penetration. You can increase product usage either by making people use it more in a certain context or by discovering new contexts for its use.
8. Enter a New Market
If you’ve fully explored the potential of a given market for your product, you can look for new markets to penetrate.
This can be a tough challenge due to differences in consumption habits, legal frameworks, and cultural values in different markets. But if you manage to adapt your product to the demands of the new market, you can massively expand your market share.
9. Use More Distribution Channels
Instead of looking for new markets, you can also target a broader spectrum of distribution channels.
For example, if you’ve only sold via retailers so far, you can try selling online via your website. This will allow you to expand your market share in the global market.
Penetrating The Market With Style
Market penetration is one of the most effective ways to grow your business.
The quickest way to expand your market share is by using a market penetration strategy. With a market penetration strategy in place, you will have an easier time getting customers to buy and use your products.
Start using market penetration today with the help of the strategies we have outlined above.