{"id":176005,"date":"2024-03-28T07:59:07","date_gmt":"2024-03-28T07:59:07","guid":{"rendered":"https:\/\/businessyield.com\/?p=176005"},"modified":"2024-04-02T12:45:58","modified_gmt":"2024-04-02T12:45:58","slug":"market-penetration-2","status":"publish","type":"post","link":"https:\/\/businessyield.com\/marketing\/market-penetration-2\/","title":{"rendered":"Understanding Market Penetration Strategies and How to Use It to Increase Sales","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"\n
The premise of market penetration is simple: it is a measure of how much of a product\/service that customers actually use compared to its total estimated market. A company can use market penetration at the industry level to review the potential for specific products or services or on a smaller scale as a way to gauge the market share of a product or service. <\/p>\n\n\n\n
In a nutshell, it offers insight into how the market and your customers view your product or service. It can also be used in developing strategies employed to increase the market share of a particular product or service.<\/p>\n\n\n\n
That being said, what strategies can you employ in line with market penetration? And how can you use it to increase sales? Those are the questions I will answer in this article.<\/p>\n\n\n\n
\nKey takeaways<\/p>\n\n\n\n
Market penetration defines how much of a company’s product is being sold relative to the total estimated market for that product, expressed as a percentage.<\/p>\n\n\n\n
It is also the process of going to market with a product in an existing market where current or similar products are already live and taking market share from the other competing companies.<\/p>\n\n\n\n
A market penetration strategy can help increase a brand’s customer base and revenue. <\/p>\n\n\n\n
By identifying your company’s current share of the market and comparing it to the demand, you can then create a penetration strategy. <\/p>\n\n\n\n
Understanding the different strategies and how to apply them can help increase your brand’s market share.<\/p>\n<\/blockquote>\n\n\n\n
Understanding the concept of market penetration<\/strong><\/span><\/h2>\n\n\n\n
Market penetration can be defined in two ways: either as a measurement or an activity. <\/p>\n\n\n\n
As a measurement, it defines how much of a company’s product is being sold relative to the total estimated market for that product, expressed as a percentage. This is also known as the market penetration rate.<\/p>\n\n\n\n
If you know your total addressable market (TAM), you can calculate the market penetration rate with this formula:<\/p>\n\n\n\n
Market penetration rate = (number of customers \u00f7 target market size) x 100<\/strong><\/em><\/p>\n\n\n\n
Establishing market size can be tricky depending on the nature of your SaaS product, as a potential customer base could be global and essentially target \u201ceveryone.\u201d The more granular you can get with your ideal audience demographics, the easier it will be to make this calculation.<\/p>\n\n\n\n