Market Penetration - Explained
What is Market Penetration?
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What is Market Penetration?
Market penetration is targeting and converting new customers in your existing market. Notably, it involves existing products, the same market.
This strategy is employed when metrics indicate that there is room in an existing to increase market share. This is generally carried out by either increasing customers or increasing the number of purchases.
Approaches to Market Penetration
Common approaches to implementing a market penetration strategy include:
- Differentiating (or adding value) to your product to gain market share from existing customers
- Convert potential customers who have low demand or urgency for the product through marketing efforts and appealing to emotions.
- Marketing - Why is Growth Important?
- How We Judge the Value of New Ideas
- What is a Sustainable Competitive Advantage?
- What is Return on Investment?
- What is Time to Profit?
- Market Share
- Market Leader
- What is Product Development?
- What is Market Development?
- What is Market Penetration?
- New to Market
- What is Diversification?
- What is Competitive Advantage?
- What is Marketing Analytics?
- A B Split
- Data On-Boarding
- Cost Per Acquisition
- What is Customer Lifetime Value?
- Churn Rate
- Measuring Environmental Impact
Academic Research on Market Penetration Strategy
- Gray marketing as an alternativemarket penetration strategyfor entrepreneurs: Conceptual model and case evidence, Lim, G. H., Lee, K. S., & Tan, S. J. (2001).Journal of Business Venturing,16(4), 405-427.c This study extends on Weigand's and Tans work regarding gray marketing to show that free-riding can be an alternative strategy to niching for entrepreneurs contemplating entry into established markets. This paper shows that an entrepreneur can successfully penetrate an established market by following a gray marketing strategy. It also demonstrates that entrepreneurs do have an alternative market entry strategy besides the commonly prescribed niching strategy. It also shows them when such a free-riding strategy would be most beneficial and most likely to succeed.
- Transnational marketing joint ventures: a viablemarket penetration strategyin the EU?, Millington, A., & Bayliss, B. (1999). European Management Journal,17(6), 635-644. This article investigates the performance of EU-based transnational marketing joint ventures (MJVs) through a set of case studies. The results emphasise the instability inherent in MJVs, and in most cases instability reflected poor performance rather than the evolution of a successful venture in the foreign market.
- Maitre Pan LubricantMarket Penetration Strategyin Eastern Australia, Permana, S. S., & Nasution, R. A. (2012).Indonesian Journal of Business Administration,1(9). This study analyses the possibility of a successful penetration of MAITRE PAN Lubricant into the Australian market by focusing on the eastern part of the market, after facing several challenges in trying to serve the whole region. The method used in this analyzing this possibility is literature study, in-depth interview, and acquiring and analyzing secondary data. This paper comes up with different strategies that might lead to the successful implementation of this market in Eastern Australia.
- Influence of Customer Satisfaction onMarket Penetration Strategyof Agency Banking at Cooperative Bank of Kenya-Nakuru Town, Njogu, A. M., & Wanyoike, D. M. (2014). International Journal of Arts and Commerce,3(2), 7-14. The purpose of the study is to assess the influence of customer satisfaction on market penetration strategy of agency banking at Cooperative Bank of Kenya in Nakuru Town. A descriptive survey design was used, with the sampling frame comprising the 400 clients who access the agency banking services of Coop KwaJirani outlets in Nakuru Town. The study sample was determined using purposive sampling. Data was analyzed with the aid of the Statistical Package for Social Sciences (SPSS).
- Foreign direct investment as amarket penetration strategyin Nigeria: an empirical analysis, Onu, A. (2009).Journal of Research in National Development,7(2). This study investigates foreign direct investment (FDI) as a market penetration strategy in Nigeria within the period 1986-2007. The study used time series data and employed regression model to determine the macroeconomic variables that influence FDI inflow in Nigeria. It was found that the growth in the Nigerian economy proxied by GDP has been the main reason for the inflow of FDI within the period under review. The study concluded that FDI is an appropriate tool for market penetration.
- Application ofmarket penetration strategyon the market of dishwashers and its complementary products, Golubi, D. (2009).(Doctoral dissertation, Ekonomski fakultet-Zagreb, Sveuilite u Zagrebu). This paper focuses on attracting non-users of an existing product, or increasing the penetration of a product.
- Market Penetration Strategyof Smartphone Companies from China for India Market: A Multiple-case study, Chandola, V. K., & Fu, H. This paper reports a study of early and rapid internationalization experience of young Smartphone firms from China, a large emerging market. Following the most popular methodology of building theories with multiple-case study methodology, the paper distilled research findings about the successful set of marketing strategies from the interviews with the managers of four popular Chinese cell phone makers/brands in their entry into Indian market. The paper then enfolds and compares literature relevant to late movers and other processes.
- Gray marketing as a low costmarket penetration strategyfor entrepreneurs: conceptual model and case examples, Lim, G. H., Lee, K. S., & Tan, S. J. (1998).Research Paper Series (National University of Singapore. Faculty of Business Administration),52, 1-26. The purpose of this study is to investigate the impact of parallel importation on brand equity in high and low product involvement arrangements. A 22 (authorized goods/graymarketed goods)(high involvement/low involvement) betweensubjects experimental design is utilized; consumer electronics and ballpoint pens are examined.
- A Strategy for the Foreign Market Penetration under Complete Information, Kim, S. J., & Kim, Y. H. (1996).Korean Economic Review,12(2), 47-69. This study examines the optimal foreign market penetration strategy of a domestic firm when the firm engages in Bertrand competition with an incumbent firm in a foreign market. The study demonstrates that under complete information about the product quality of the entrant firm, the entrant firm prefers to choose a less expensive entry mode when the foreign consumers' marginal rate of substitution between quality and price is high.
- Frugal Innovation: A Strategy for Emerging Market Penetration and Beyond, Kuo, A., & Ng, S. This paper uses case studies to delve into details of how various businesses harness frugal innovation to develop simple, affordable products to penetrate emerging markets. The cases were chosen through purposeful sampling to select information-rich cases. The data required for the study were collected mainly from publicly available archival sources, including company websites and documents.