CX Survey Tips

How to Understand Market Penetration and Create a Strategy Around it?

Everyone wants their company to expand. This seems self-evident, given that effective and successful expansion means more income, brand exposure, brand loyalty, and more — and we know this is true by looking at today’s most successful and well-known businesses. The question is, what do these extremely successful businesses do to ensure that they are well-positioned for long-term growth?

What is Market Penetration?

The amount of a product or service sold to clients in relation to the expected total market for that product or service is known as market penetration. It’s a metric that can help determine the size of a potential market or aid in the development of a strategy for expanding a product’s or service’s market share.


If you’re measuring market penetration, use the method below to figure out how much a product or service is used by customers in comparison to the total expected market. To put it another way, divide the current sale volume of your product or service by the total selling volume of all similar products on the market.

Market Penetration Rate = (Number of Customers / Target Market Size) x 100

It’s critical to keep track of your market penetration on a regular basis in order to spot any spikes or losses. If you’re wondering how often you should assess market penetration, a reasonable rule of thumb is to do it after each marketing and sales campaign. This will emphasize any changes in penetration, and you’ll have a better notion of your campaign’s success as a result (s). Let’s take a closer look at what market penetration is and why it’s such a successful growth strategy.

How to Devise a Successful Market Penetration Strategy?

When a firm pursues a bigger market share by leveraging current products in existing markets, this is known as a market penetration strategy. It’s a method for a company (that already has a product on the market) to expand its business by increasing sales among existing customers. You might hear the term “Ansoff Matrix” as you start working on your market penetration plan. The Ansoff Matrix is a tool that lists four different growth strategies for companies to explore.

Image Source: MindTools

Businesses’ growth methods get riskier as they travel to the upper-right quadrant of this matrix. We’ve included information about the Ansoff Matrix in this post because it proves and emphasizes that market penetration is a highly beneficial and achievable strategy to efficiently build a firm, even for risk-averse entrepreneurs.

You might be asking what specific methods under the umbrella of market penetration you can use at your company at this stage; let’s go through a few of them next.

  • Pricing: Reduce or increase the price of one of your products.

  • Refresh your marketing strategy: Re-evaluate your marketing strategy and/or roadmap.

  • Determine the need for a new product and bring it to market: To determine the need for a new product, survey and study your consumers and target audience (or feature). Then design and sell that thing.

  • Change or update your product: Update or change a product or feature to better address the concerns of your customers and buyer personas.

  • Expand into new markets and give franchise opportunities: Determine new markets in which you may extend and build your company. Consider this: In what new locations may we open stores or prospects? To grow your brick-and-mortar firm, you may start giving franchise options.

  • Find a company partner with whom you can collaborate: In a mutually beneficial way, partner or merge with another company (e.g. run a co-marketing campaign).

  • Invest in a small business or a competitor in your field: Consider acquiring a small firm or competitor in your field if you have the resources to expand your customer base and offerings/capabilities.

  • To increase loyalty, offer a promotional program: Allow customers to enroll in a loyalty programme that rewards them for providing you with their contact information in exchange for a discount (e.g. discounts, birthday gifts, inside information, etc.).

  • Create a fresh marketing strategy: Create and launch a marketing campaign or project to promote your product line in a fresh and innovative way that your clients haven’t seen before. Analyze the success of your campaign so that you can refer to it in the future.

  • Increase the number of sales reps on the road: Encourage sales representatives to have more encounters with qualified leads (e.g. focus on social selling and meeting prospects where they are).


We just went through a few reasons why market penetration is so important for your company’s long-term success. And, as you’ve learned throughout this blog article, it’s a low-risk, highly effective growth plan. There are a variety of market penetration tactics to consider, plan, and apply at your firm, so choose the finest option for your objectives and get started.