Market Penetration is the percentage of total target market. Which has purchased an organization’s products or services in a given time period. Improve Market Penetration is a value which tells you how many people use the particular product. This value may also indicate whether your product choice is right for this customer. Usually, companies reach out to as broad a consumer base as possible for their financial gain. However, it is essential that they consider their targeted consumers carefully.
When determining the potential market of a product or service company considers certain factors such as availability of similar existing products, growth rate in new technologies and the demographic factor .
Market Penetration is an important determinant of a business on its growth path. It gives an idea about the demand on a specific product on a definite time period. The primary step towards developing a successful marketing strategy starts with identifying. And all those factors that play a role in deciding the company’s potential market.
The following are few suggestions for finding effective markets to enter:
• Consumer- When a product is meant for household use. It is beneficial to approach the largest consumer group that can gain maximum benefit from it.
• Demographic Considerations If your product or service have any age restrictions. Then you need to find out who all will fall into its category. For example if you are selling liquor then it is better to approach bars and pubs rather than general stores.
• Channels of Distribution It may happen that your target consumers may already be using some other product available in the market. Which might be similar to yours with almost the same features but still they like your idea and would like to switch over to your product. It is always better to have a target group which is not already using any of the existing products available in the market so that it will be easy for them to switch over.
• References If you are new or don’t have much idea about. Who all can benefit from your product idea, seek out people with some experience and ask for suggestions.
Location Factor-Matching your target consumer with your location factor- You, should carefully consider this factor as consumers are more favored to buy if they do not have to travel too far.
There are six actions to take in order to increase market penetration:
1) Penetrate new markets
If there is a new market for a product, it should be considered as a way of Improve Market penetration. This is particularly useful if the current market is flat or declining. It is always risky when you go out on your own and start a new project. However, this can be an exciting opportunity for growth that may lead to better sales cycles as well as strengthening customer relationships with the company overall-from scratch or through acquisition by another firm! Customer insight and experience can help with understanding how it would work successfully within that particular marketplace.
2) Expand the usage amongst existing customers
In many cases, companies have more success trying to get its customers to use their products or services more often. This might mean that the company sells more to existing customers or that there is a change in customer behavior. For example, persuading them to purchase additional products or services.
3) Build new alliances
When market penetration is not possible through internal means alone. Companies will look at external ways of expanding their business. This can be done by looking at strategic alliances with other companies who have complementary products and areas of expertise. The aim of this approach is to distribute costs between two businesses. But also create greater potential opportunities both within the alliance itself as well as outside it.
4) Enhance the product/service offering
One way to grow market share is by taking a different approach. The right approach can make your products or services more enticing to customers by using innovative means of enhancing them. In some instances this also includes packaging changes or even new promotional strategies that offer a different outlook on things yet still provide success!
5) Market Penetration
It may become necessary to market the products or services to potential customers. Who didn’t previously know about them in order to increase sales. The aim of this strategy is to either get existing customers to buy more products or get new customers on board. By promoting the good points of the business further.
6) Redouble Internal Efforts
The company needs to return back towards their own measures in order grow current market share and also maintain it. This could include changing prices, making internal communication more efficient between departments,. And also encouraging staff motivation and creating a positive work environment which impacts customer satisfaction.
At the end of the day market share has a key role to play within any type of business and understanding. It better will help managers, directors and shareholders alike in making big decisions for their company. From a business perspective, analyzing the competitive landscape and industry trends can be difficult. However, it is important for any company to keep an eye on their competition. In order not only stay afloat but also grow as well!