Marketing Penetration
🛑 ALL INFORMATION CLICK HERE 👈🏻👈🏻👈🏻
Marketing Penetration
Everything you need to know about funding, growing and scaling your startup.
If your SaaS startup is looking for low-risk business growth strategies, creating a market penetration strategy should be one of the first things you think about. Although, before moving forward, it’s important to identify a clear definition of market penetration as it relates to SaaS and gain a better understanding of what market penetration strategy is by taking an in-depth look at some common examples.
Depending on where you look, the market penetration definition could be misleading, as there are two different meanings. As shown below, market penetration can be defined as either a measurement or an activity. In this article, we will review both market penetration definitions and how they relate to SaaS.
Market penetration defined as a measurement is the assessment of how much a product is being sold relative to the total estimated market for that product, expressed as a percentage. This is also known as market penetration rate.
If you know your total addressable market (TAM), you can calculate market penetration rate with this formula:
Establishing market size can be tricky depending on the nature of your SaaS product, as a potential customer base could be global and essentially target “everyone.” The more granular you can get with your ideal audience demographics, the easier it will be to make this calculation.
It’s suggested that average market penetration for a consumer product is 2 to 6%, while business products can range anywhere from 10 to 40%. If you can refine your SaaS product to capture 10% of the TAM in any industry – you’ll probably be doing quite well!
Take the smartphone industry for example – global leaders Apple have a market penetration rate of 19.2%, with Samsung coming in second at 18.4%, Huawei at 10.2%, and a range of smaller brands taking the remainder of the market share to its 100% completion.
The smaller smartphone companies such as Oppo and Xiaomi who are coming in around 7% have plenty of opportunity to increase their market penetration by improving their strategy around pricing, product improvement, consistency, and marketing in order to take more of the market share away from Apple and Samsung.
Market penetration defined as an activity (see the Ansoff Matrix below) is the process of going to market with a product in an existing market in which current or similar products already live, and taking market share from the other competing companies. This is also known as market penetration strategy.
The term market penetration (defined as an activity) stems from the Ansoff Matrix, developed in 1957 by Igor Ansoff, which helps companies plan their strategies for future growth. The Ansoff Matrix is a 2X2 matrix representing four different business growth strategies in which a company either enters a new or existing market, and with either new or existing products.
Market penetration strategy is one of the four business growth strategies identified in the Ansoff Matrix, the other three being market development strategy , product development strategy, and diversification strategy . Market penetration strategy refers to when the company attempts to grow using existing products in existing markets, as shown in the bottom left quadrant of the matrix graphic above.
A market penetration strategy carries a low amount of risk, and is an ideal business growth strategy for SaaS startups that are bootstrapped or unwilling to invest heavily in more risky growth strategies.
Put simply, it’s a means of planning how to grow in an already thriving market where similar products exist, and gaining market share by taking your competitors’ subscribers.
Positioning yourself in an established market is a safe bet, because it means there is a need for products in this area. However, it requires strong implementation and execution of strategies around your product positioning , pricing, user experience, and marketing in order to compete and grow alongside existing companies.
When you’re thinking about creating your market penetration strategy and increasing your market share, you’ll need to consider the different ways you can grow your company using your existing SaaS offering to make it more appealing to the customers who exist in your target market.
This can be accomplished with the following tactics:
Price adjustments and refinements tend to be the focus of market penetration strategies for SaaS companies.
As the SaaS industry grows, it becomes harder for new companies entering the market to gain market share. The market penetration rates for software products in the collaboration and CRM spaces especially (e.g. Basecamp and HubSpot) are already quite high due to the large number of SaaS products in that space.
Pricing is one of the main tactics that emerging SaaS products use to gain market share and grow their revenue when using market penetration strategy. These adjustments can be easily measured to determine their level of success.
Did market share increase or decrease when pricing went from monthly to annual? How many new customers were acquired with the announcement of a new pricing plan? Would dropping your subscription prices work to take customers away from your competitors?
Price drops works well in competitive niches where consumers are typically buying based on the cost of a product. By looking at your competitors and comparing your product and services, it can be a strategic move to adjust your pricing in order to achieve greater market penetration.
If your startup is attempting to grow through market penetration strategy, changing tactics or becoming more aggressive with your marketing campaigns can help to increase your awareness in the market. This, in turn, can woo more of your competitors’ customers into switching and signing up for your product instead.
Marketing can also help persuade your existing customers to stick with you instead of leaving for the competition. Loyalty schemes, power user features, strategic alliances , and finding unique ways to deliver value to your users can all help you keep your customers. If your users have a stellar experience with your product, they’ll be more likely to help you out with word of mouth marketing which can also drive an increase in your market share.
If you can’t beat ‘em, join ‘em. Or rather, buy them out. Acquisition as a market penetration strategy is almost as old as business itself. Buying a company in your industry means you’re essentially buying the customer base and the market share that it brings with it – or alternatively, you can buy the competition and then shut them down altogether.
If you’ve got the motivation and the budget, acquisition can be an effective tactic. If you’re in startup mode, acquisition is probably not in your ballpark just yet. In this case, you could look into strategic alliances with similar companies in order to capture their audience and widen your market by doing so.
Listening to your customers, and keeping track of what competitors’ customers are saying about their products can help you pinpoint essential features and functions that people are looking for.
A slight adjustment to your product could make all the difference in terms of your market penetration rate by giving your market something that they need and can’t find with any other company.
Acquisition is huge in the SaaS world, with industry giants regularly snapping up smaller companies in order to expand their services and capture more of the market share. Here’s a list of the top 10 company acquisitions that happened over the last year.
Diet Coke was a huge hit when it was released, but it attracted primarily female consumers. Men were avoiding it because it felt like more of a feminine drink.
Coca-Cola’s solution? “Bloke Coke”, or rather Coke Zero, which is essentially the same in terms of taste and benefits but squarely positioned and marketed to capture the male market share they were missing with Diet Coke.
Android is well known for its penetration pricing strategy . By offering its phones at a low entry price, it can aggressively lure consumers from Apple who have the main market share in the smartphone market.
Market penetration strategy involves focusing on selling more of your SaaS product into your existing market in order to acquire a higher market share and gain more of your competitors’ customers.
With strategic planning around pricing, competitors, increasing your promotional efforts, and making any necessary changes to your product, it should be possible to increase your market share and slowly gain dominance in your market.
Want more marketing strategy and SaaS insights? Subscribe to our free email newsletter to get our latest stories delivered to your inbox (about twice a month).
Your journey to a successful startup begins here.
Looking for answers to your fundraising questions? Lighter Capital’s guides have the answers you need
©2020 Lighter Capital. All Rights Reserved. RevenueLoan® is a registered trademark of Lighter Capital, Inc. For California borrowers, loans are made or arranged by Lighter Capital, Inc. pursuant to its California Finance Lenders Law License, #603K634.
(number of customers ÷ target market size)
Market Penetration
What Is Market Penetration Strategy? (Definition and Examples)
Market Penetration : Techniques, Advantages and Disadvantages
Understand Market Penetration and How to Create a Strategy
Market Penetration (meaning, example)| Top 7 Market Penetration Strategy
Home » Marketing management articles » Market Penetration: Techniques, Advantages and Disadvantages
Market penetration can be defined as the strategies or methods that are adopted by an organization or proposed in order to create or penetrate an existing market and establish a stable bottom in terms of business.
The term is often used when a new company wants to enter the market, which is already saturated and was to establish a firm base. Generally such companies use Penetration pricing , wherein they drop the pricing of the products so that they can penetrate the market better.
The situation of the market can be mentioned as a thick layer of ice below which the water is in a liquid state, and the new entrant wants to penetrate the ice and sink into the bottom to have roots.
To achieve this, the organizations, need to design a strategy which will break the customers from existing products and make them loyal to their new products — the primary objective of having the strategy of market penetration to obtain higher market share .
This involves converting the current product users to new products and getting entirely new customers. Competition conversion plays an important role in case of market penetration, which can be implemented by strategies like competitive pricing or reward system or increasing marketing communications .
There are multiple factors which lead to the success of market penetration like better inventory management making the costs lower or even making lesser and lesser middleman between customers and the organization.
Market penetration is special independent on the efforts of the marketing and sales department you need to create a buzz in the market and increase the noise level for their products.
Since the focus is on increasing the market share of the product in the market, most of the pressure is on the sales team to increase the sales.
Most of the companies have common reasons to implement a market penetration strategy. Here are a few of the common reasons for implementing market penetration:
The existing companies who are suffering from reduced sales and consistently reducing users will implement market penetration strategy to improve their market share.
Market penetration helps to increase the user based drastically and reduce the competition by providing a competitive advantage to the company implementing market penetration for their products.
By reducing their prices or by implementing schemes attractive to the customer’s companies ensure that interpenetrate the existing market break the users from the existing product and increase the usage of their product.
Market penetration is an important strategy for companies which have newly launched in the market to survive.
If they do not penetrate the market successfully the product will not what say the market, and it will be difficult for the company to survive in the tough competition which is by the strategy of market penetration is very useful for them to create a customer base.
That several strategies for market penetration which are employed by different companies depending on the product and nature of the industry and also according to the nature of the market and the rivalry.
For most of the products and industries, price penetration works better, but for specialized industries like pharmaceutical products, product quality and development of good products is the only way to achieve market penetration.
Here are a few of the techniques which are used by almost every company:
This is perhaps the most widely used technique of market penetration, which is used by many organizations. This is one of the sure-shot technique which works with almost any industry and every product.
The farm using market penetration reduces the price below the lowest competitor. This attracts many customers from the existing product user base and converts them or rather compels them to buy the newly launched low priced product.
Price is an important factor in case of purchasing for more than 70% of the customers. To recover costs, many of the existing companies cannot reduce the price.
This is well new entrants who win the price war by using price penetration to grow their customer base much higher than the existing competition.
For example, to compete with existing supermarkets and grocery stores when Walmart was launched, they had to reduce the prices of their products to pull customers.
Distance use this strategy on certain days, which are termed as black Fridays or sale days when the prices are exorbitantly lower than their competitors.
The companies ensure that the price remains the same for some sometime during which the customers get used to the product and then the companies slow they start increasing their prices.
While applying this strategy, the firms should ensure that their product is up to the mark with other competitors.
If this is not the case, then the customers would buy the product one time and later on, will move back to the competitors. Price strategy can be used to pull the customers, but once the customers are pulled, to retain them, product quality , service, and other factors should be used along with few marketing strategies as described below.
Having more promotional strategies and campaigns always benefits the product and helps to establish the brand name and brand value in the market. The companies should ensure on promoting their product through every available medium so that it reaches the customers, and product awareness is built up.
It is very unrealistic of the companies to expect a return on investment immediately after the marketing campaign because it takes some time for the word of mouth to spread, and then the sale picks up.
The combination of different promotional media can be used to promote the product, which helps to achieve better penetration in the market.
It becomes relative the cheaper to market a product via social media. Digital marketing also ensures that the right target audience is reached and then the promotional material is viewed by the targeted audience, thereby ensuring the complete utilization of the promotional material.
This is one of the effective technique for achieving deep market penetration. A part of Marketing is also using different offers and loyalty programs in order to attract and retain customers.
Most of the times, customers are attracted to the product and purchase it owing to a low price but fail to make a repeat purchase.
For such customers, in order to encourage repeat purchases, it is important that companies introduce different reward programs. For example, Airline rewards program was one of the most successful strategies to ensure that flyers book the same flight every time and earn miles, which can be redeemed later.
Following which many credit card companies introduced the same reward points technique in order to increase credit card users.
Stronger distribution network aids to achieve market penetration. Distribution channel ensures that the product is available for the end customer at the right place and is reaching within the time limit so as to ensure that customer demands are matter on time.
Reaching the product to the customer has become of paramount importance since e-commerce has grown.
Customers place orders on e-commerce websites and expect the deliveries within a short time. The shorter the delivery time, the higher will be the customer satisfaction rate, which will further ensure a better market penetration over the competitors.
The distribution network is also directly related to the service of the customers.
This is considered as one of the costliest ways to achieve market penetration. Having a strong research and development department will ensure that the product is extremely innovative and topnotch having a strong competitive advantage.
The features of the product should be unique and appealing to the customers, and then in such case, the price of the product will not matter for quality-conscious customers.
The product which is improved and new, always attract customers and trendsetters who do not hesitate to buy and try the new product .
Once the positive reviews from the trendsetters are in in the followers and laggards, start using the same product. This improves the customer base and increases the usage of the customer, and also insurers repeat usage and repeat purchase from the customers.
For example, until a few years ago, Apple was considered as one of the most innovative companies, and every iPhone that they launched was bought by most of the customers because of the unique features that it provided.
The high price did not matter for the customers because the features that wear packed with the iPhone very much more appealing, user-friendly, and they resonated with customers.
But now Apple has gone down in terms of innovation and has become more of a follower then and of energy adaptor.
Other companies like Google have brought their own product like google pixel 3 and other cell phones which are way more efficient than iPhone both in terms of quality as well as the features and are priced at a much lower price than iPhone.
We often encounter these terms causes ok ready and tend to misinterpret or use them synonymously with each other; however, the term market share is very different than the term market penetration.
Market share is the amount of the sale that is happening in comparison with the competitors. For example, if there are five subscribers for Netflix, 2 for amazon prime and 3 for other video streaming services, then out of 10 subscribers for out of hundred percent the market share of Netflix is 50%.
Market penetration, on the other hand, is a strategy which is used to achieve, higher market share.
Market penetration is the means to achieve, and market share is the end result.
Market penetration is measured in terms of market share while market share is measured in terms of a number of customers or users or the sale that happens in the market in comparison to other companies and products.
Market penetration is a one-time process which is achieved, and then the achieved market share is to be maintained.
Market penetration is a strategy which is used to increase the market share.
I love writing about the latest in marketing & advertising. I am a serial entrepreneur & I created Marketing91 because i wanted my readers to stay ahead in this hectic business world. You can follow me on Facebook . Let's stay in touch :)
Your email address will not be published. Required fields are marked *
Copyright © 2020 Marketing91 All Rights Reserved
Drunk Wife Peeing Tumblr
Naked Women Pics
Hd Porno Russia Pee
Arab Naked
Hairy Mature Outdoor
