#MARKET PENETRATION PRICING EXAMPLES HOW TO#

You’ll sometimes hear the terms “market penetration” and “ market share” used interchangeably.

#MARKET PENETRATION PRICING EXAMPLES HOW TO#

(We’ll show you how to calculate your market penetration rate later in the post.) While a high penetration rate implies you’ve almost hit market saturation. Market penetration is measured by “market penetration rate.” This metric calculates what proportion of the total addressable market (TAM) you’ve captured with your brand, product, or service.Ī low market penetration rate suggests potential for market growth. This is considered the riskiest strategy. Diversification: The attempt to capture a new market with a new product offering.Market development: The attempt to capture a new market with an existing product offering.Product development: The attempt to capture more of an existing market with a new product offering.

This is considered the least risky growth strategy. Market penetration: The attempt to capture more of an existing market with an existing product offering.

The matrix presents four key growth strategies arranged according to whether they involve new or existing products or markets. Market penetration is often associated with the “Ansoff Matrix.” This strategic planning tool helps businesses decide between different avenues for growth. But in most cases, the goal remains the same: to capture more of the market you already operate in. There are several ways to achieve better market penetration, like attracting new customers, retaining existing ones, or acquiring competitors. Market penetration is a measure of the reach and sales of your brand, product, or service within an existing market.

Market penetration pricing examples