Market Penetration Strategy Business Plan

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.

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As a result, market leaders can often produce a product cheaper than their competitors, given the scale of their operation.

Market development is often a strategy of specific details or action steps needed to increase the number of potential customers.

Businesses often rely on advertising and marketing to attract and sell to specific demographic groups in their markets.

If your market is saturated, you may need to find another approach to drive out competitors.

The penetration numbers might indicate the potential for growth for cell phone makers.

In other words, market penetration can be used to assess an industry as a whole to determine the potential for companies within the industry to gain market share or grow their revenue through sales.

Revisiting our example, the global cell phone market penetration is often used to estimate whether cell phone producers can meet their earnings and revenue estimates.

If the market is considered saturated, it means that existing companies have the vast majority of the market share—leaving little room for new sales growth.

You may need to use different strategies to achieve and sustain growth.

Read about other business growth strategies, including: Understanding your market penetration can help you measure how your product is doing in the market, and how customers view it in comparison to a competing product or service.


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