Working at a startup sounds great. But it can get confusing, too, especially at the beginning. If you feel like at some times you don’t have a clue of what you’re colleagues are talking about; you’re not alone. From now on, don’t just nod friendly when terms like ‘unicorn’ or ‘disruptive technology’ come up. Every week we’ll explain a common startup-expression in our Startup For Dummies. This week: Market Penetration.
Market penetration is a business growth strategy with which a company is attempting to enter a new market or market segment. But besides, market penetration can also stand for the percentage of the market that a product of service is able to capture. For companies that are in the stage of setup Market Penetration can be really useful.
1 // price adjustments
After analysing the prices of you competitors you can ask less money for your product or service than they do. After you get a loyal group of customers you can increase your price again. You can also increase the price to show potential consumers the quality of your product.
2 // increased promotion
With a campaign you can improve the promotion of your product or service. Advertisement can be used to create more brand awareness as well.
3 // distribution channels
A higher percentage of market penetration can also be achieved by adding other distribution channels to sell your product. For instance an online shop or email marketing campaign instead of your regular channel like a retail outlet.
4 // improved product
By changing the actual product or packaging of the product, you can change the perception of your audience. After you improve your product you should let your (potential) consumers know that the product is new or improved.
If you want to measure the success and impact of your strategies and estimate your market penetration, you should do focussed research on your target audience. You can do this by identifying potential consumers on the basis of demographic groups and calculate the size of the target market. Read this article for a more extensive roadmap.
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Blog by: Alma