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As a metric, market penetration is expressed as a percentage.You can calculate it by multiplying the current sales volume by 100 and dividing that amount by the total sales volume of all similar products, including those sold by competitors. If a company has a high market penetration for their the products, they're considered a market leader in that industry.
Market penetration is one of the four main business growth strategies.
It involves focusing on selling your existing products or services into your existing markets, with the aim of increasing your market share.
As a metric, market penetration relates to the number of potential customers that have purchased a specific company’s product instead of a competitor’s product, or no product at all.
Market penetration for companies is typically expressed as a percentage, meaning the company's product represents a certain percentage of the total market for those products.
For example, raising or lowering your prices and heavily promoting your products can help make the market unattractive or inaccessible for smaller competitors.
If you can compete on price and offering, you may look at ways of increasing usage by existing customers.
To devise a good market penetration strategy, you must have a successful product and a detailed knowledge of your market.
You must also thoroughly understand your competitors.
Market penetration can be used to determine the size of the potential market.
If the total market is large, new entrants to the industry might be encouraged that they can gain market share or a percentage of the total number of potential customers in the industry.