When you offer better prices than your competitors, luring out their customers becomes easier that previously expected. ![]() Though, market penetration strategy doesn’t work for all products and businesses, so some companies use different marketing strategies that seem to be more beneficial.Īdvantages of Market Penetration Strategyįast Growth – If your business and marketing objective is to enlarge your consumer base, then market penetration is the most effective way to act. ![]() While the demand is increasing, the organization saves money on product creation costs due to the greater volume of production. Market penetration strategy takes advantage of low prices to increase product demand and increase market share. For instance, if we use an effective marketing strategy that will increase product awareness in certain areas it’ll result in higher product consumption that will also increase market penetration.Īdvantages and Disadvantages of Market Penetration Strategy/Pricing Increase Usage – Market penetration can be increased through product consumption. So, periodically updating your product (always to better, never lower the quality) and changing its packaging will, most probably, benefit your business. Buyers always want better and when the opportunity comes, they always shift towards the best. Improving Products – The best practice of engaging and interacting with customers is to inform them that your product has changed to better.Ĭonsumers mostly fall for the trick because the interest and curiosity that the improved product drives are irresistible. For example, if your organization’s primary source of income is selling through retail outlets, it can open other channels like email marketing, telemarketing, etc.Īlso, this way you can increase product sales, distribution channels, gain extra space on the market and overall profitability. Note, that the campaign must be well-planned and analyzed because if your ad looks like “XX% off on Y Product for a limited time” can be easily countered by competitors with their own promotional campaigns and also retrieve their lost market share.ĭistribution Channels – One of the most constructive components of market penetration strategy is distribution channels. Moreover, companies can create either short or long-term campaigns and structure them according to their budget and needs. Increased Promotion – Investing more time and strength in a promotion can dramatically increase market penetration.įor example, advertising is one of the most effective ways to increase brand awareness. ![]() In both cases, don’t overdo it because it may seem suspicious (lowering prices too much may indicate to low quality and high prices might seem as a company that has only one objective-gain profit) and might make customers doubt your quality, fairness, and trustworthiness. Price Adjustment – One of the most frequently used market penetration strategy is price adjustment.įor instance, when a firm aims to increase sales, lowering prices is an effective tactic to attract potential customers.įurthermore, after thoroughly analyzing the prices of your competitors you can either increase prices to show buyers that the quality of your product/service exceeds your competitors or lower them to charm potential consumers with reasonable prices. Marketing Penetration Strategies and Tactics Though, before deciding to use market penetration strategy, it’s crucial to understand the advantages & disadvantages and risks it carries. The aim of market penetration is to effectively use your product, enter the market as quick as possible and seize a large market share.įurthermore, market penetration is frequently used a measure to determine, whether your product or a service is capable of capturing a fixed percentage of the market.Īlthough market penetration strategy doesn’t make any radical changes to the firm’s corporate marketing strategy, it has an unbelievable potential to grow profitability and revenue.Īlso, if a business plans to increase market penetration, it’s important to implement certain tactics & strategies that will increase your sales and decrease the competitors. When a company decides to enter a new market, it’s essential to use market penetration strategy.
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