What is market penetration

What is market penetration and how to increase it?

What is market penetration?

Market penetration measures how much of a given market a company has captured. So it says how much of the potential customers a company has been able to convert into paying customers.

The higher the market penetration, the better it is for the company, indicating that they’re doing well in attracting and converting potential customers into buyers.

What is the Market Penetration Formula?

The formula for market penetration is as follows:

Market Penetration (%) = [(# of units sold) / (total units available)] x 100

This simply means that market penetration is calculated by dividing the number of units sold by the total number of units available and then multiplying by 100.

What is the purpose of market penetration strategy?

Market penetration

The purpose is to increase sales and profits. The more of the market a company can penetrate, the better it is for business. But it’s not just about capturing as much of the market as possible. It’s also about attracting new customers (market expansion) while at the same time retaining old ones (market share).

Tips for increasing your market penetration?

Of course, everyone wants to increase their market penetration, but it’s not always that easy. Here are some tips to help you get started:

Tip 1: Know your target market.

You need to understand who your target market is and what their needs and wants are. This will help you design products and services that appeal to them and make them easier to sell.

You need to understand who your target market is and what their needs and wants are. #marketpenetration Click To Tweet

Tip 2: Advertise.

Advertising is a great way to introduce your product or service to potential customers. It enables you to let people know about your organization and the products it offers so they can decide whether or not they want to buy from you.

Tip 3: Offer a good customer experience.

Your product might be fantastic, but if the customer experience of buying is poor, you’ll not have much success. It would be best to ensure that your customers are satisfied with every aspect of their purchase from start to finish.

Tip 4: Keep track of your market penetration.

You’ll need to track how many people you convert into buyers and then compare it to the total number of potential customers. This will help you measure your progress and identify areas that need improvement.

How to develop a market penetration strategy?

Let’s now start creating the ultimate market penetration strategy by following these simple steps:

Step 1: Know your business and its products or services well.

Before you can do anything else, you need to understand what your business is all about and the products or services it offers. This will give you a strong foundation for building your market penetration strategy. So write down all your products or services and their biggest benefits.

Step 2: Analyze your target market.

Once you know your business, it’s time to move on to analyzing your target market. This will involve studying who your target customers are and what their needs and wants are. This information will help you design products and services that appeal to them.

Step 3: Create a marketing strategy.

Now that you know your target market, it’s time to create a marketing strategy. This will involve developing a plan for reaching out to and attracting potential customers. For example, you might decide to use a variety of marketing channels such as online advertising, PR, and direct mail. Write it all down and make sure it’s detailed.

Step 4: Implement your marketing strategy.

Once your marketing strategy is in place, it’s time to implement it. This will involve putting all the pieces into action and ensuring everything runs smoothly. It might take a little bit of tweaking along the way, but with a bit of perseverance, you’ll be able to achieve success.

Step 5: Measure your progress and adjust as needed.

As with any other type of strategic plan, you need to measure your progress along the way and make any necessary adjustments. This will ensure that you stay on track and continue achieving good results.

Market Penetration strategy example

You’d love to know a real live example of a successful market penetration strategy, right? Well, let’s look at one of the most successful fast-food chains in history: McDonald’s.

McDonald’s market penetration strategy example What is your favorite type of burger? The chances are that you’ll find it under the golden arches. Big Macs, quarter pounders with cheese, McRibs, Happy Meals, you name it – McDonald’s has it all. And they’ve been very successful in bringing their burgers to the masses.

How did McDonald’s achieve this level of success?

Using various marketing techniques such as online and print advertising, PR, and direct mail, they also have a strong focus on customer service, ensuring that every customer has a positive experience.

McDonald’s is an excellent example of a business that has successfully penetrated the market. And you can use their strategy as a template for your own business.

Remember, it’s essential to know your business and products or services well before you start trying to penetrate the market. Once you know what you’re doing, it’s easier to attract more customers and achieve success.


So there you have it – a simple guide on developing a market penetration strategy for your business. Just remember to take things one step at a time, and you’ll be on your way to success. Good luck!

Critical takeaways for Market Penetration strategy

  • Know your business, products, or services well before using a market penetration strategy.
  • Spend some time studying the needs of your target market so that you can create products or services that appeal to them.
  • Use a variety of marketing channels to reach out to potential customers.
  • Implement your strategy and measure your progress along the way.
  • Make necessary adjustments as needed.