It can also refer to the strategy a company or organization uses to expand or further saturate their customer base in a market they are already in. For example, you may develop a market penetration strategy
if you are launching a new product that would appeal to a different segment of your current market
.
What is the penetration rate?
The penetration rate (also called penetration, brand penetration or market penetration as appropriate) is
the percentage of the relevant population that has purchased a given brand or category at least once in the time period under study
.
How do you calculate market penetration?
To calculate market penetration,
the current sales volume for the product or service is divided by the total sales volume of all similar products
, including those sold by competitors. The result is multiplied by 100 to move the decimal and create a percentage.
What percentage of the market do you hope to penetrate?
For example, Jensen suggests that the normal market penetration for a consumer product is
between 2 and 6 percent
, and between 10 and 40 percent for a business product. Therefore, multiply the number of customers in your target market for a consumer product by 2 percent.
How do you calculate household penetration?
Household penetration is defined as
the portion of total households reached within a geographical area by a product or a service
. For example: Out of 30,000 homes in Delhi only 6,700 subscribe to a cable TV service in Delhi then the household penetration level would be expressed as (6,700/ 30,000)*100 = 22.33 %.
What are examples of market penetration?
For example, if there are 300 million people in a country and 65 million of
them own cell phones
, the market penetration of cell phones would be approximately 22%. In theory, there are still 235 million more potential customers for cell phones, or 78% of the population remains untapped.
What is a good market penetration?
An above average market penetration rate for consumer goods is estimated to be between 2% and 6%. A good penetration rate for business products is
between 10% and 40%
. Some brands calculate market penetration every quarter while others find it useful to do so after each ad and marketing campaign.
Which country has the highest Internet penetration rate?
As of July 2021,
Denmark and the UAE
lead the ranking for countries with the highest internet penetration rate, both recording 99 percent of their population accessing the internet. South Korea reported an internet penetration rate of 98 percent, followed by Sweden, and Switzerland at 97 percent.
What companies use market penetration?
Take the smartphone industry for example – global leaders
Apple
have a market penetration rate of 19.2%, with Samsung coming in second at 18.4%, Huawei at 10.2%, and a range of smaller brands taking the remainder of the market share to its 100% completion.
What is penetration strategy?
Penetration pricing is
a marketing strategy used by businesses to attract customers to a new product or service by offering a lower price during its initial offering
. The lower price helps a new product or service penetrate the market and attract customers away from competitors.
Does Starbucks use a differentiation strategy?
Starbucks Coffee uses
the broad differentiation generic strategy for competitive advantage
. In Michael Porter’s framework, this strategy involves making the business and its products different from other coffeehouse firms. … This generic strategy is also manifested in Starbucks Corporation’s organizational culture.
What are the 4 growth strategies?
- Market penetration. The aim of this strategy is to increase sales of existing products or services on existing markets, and thus to increase your market share. …
- Market development. …
- Product development. …
- Diversification.
What is the best marketing strategy?
- Educate with your content.
- Personalize your marketing messages.
- Let data drive your creative.
- Invest in original research.
- Update your content.
- Try subscribing to HARO.
- Expand your guest blogging opportunities.
- Use more video.
How do you use penetration pricing strategy?
A penetration pricing strategy
prioritizes market share over profits for a given time period
. The goal is to generate demand, rapidly build a customer base, and maximize brand loyalty in a short time. Penetration pricing is when businesses introduce a low price for their new product or service.
How can I increase my penetration rate?
- Price adjustments. One of the common market penetration strategies is to lower the products’ prices. …
- Increased promotion. Businesses can also increase their market penetration by offering promotions to customers. …
- More distribution channels. …
- Product improvements. …
- Market development.
How does Apple use market penetration?
Market penetration involves
gaining a larger share of the current market by selling more of the company’s current products
. For example, Apple applies this growth strategy by selling more iPhones and iPads to its current markets in North America. … Advertisements encourage more people to buy Apple products.
