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What Is Market Penetration Strategy_ 12 Tips You Must Know What Is Market Penetration Strategy_ 12 Tips You Must Know

Events — 09 May 2023

What Is Market Penetration Strategy

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What Is Market Penetration Strategy? 12 Tips You Must Know

Looking to grow your business and boost your ecommerce conversion rates? Already working in a competitive market but don’t know where to start? The key to gaining traction with a whole lot of competition out there lies in your market penetration strategy. 

What exactly is market penetration and how can your business go about achieving it? Well, that’s exactly what this article covers. From definitions to strategies, we’re about to tell you everything you need to know about developing an amazing market penetration strategy. So, without further ado, let’s get down to it.

market penetration strategy

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What is market penetration?

Market penetration can be defined in two ways:

  1. As a process
  2. As a measurement

When we think of market penetration as a process, it refers to the act of taking a new product or service to market within an existing market in which similar products or services already exist. The act of penetrating that market is to take a portion of the market share from the other businesses competing in that market. 

Market penetration can also be understood as a measurement. Market penetration as a measurement refers to the amount of a product or service that is sold as a proportion of the total market size. This measurement helps brands work towards increasing potential market share. 

​​What is a market penetration strategy?

So, that’s what market penetration is but what makes up a market penetration business strategy? In other words, how can businesses and organizations go about achieving good market penetration? At its most basic, a market penetration strategy is a type of growth strategy. A market penetration strategy is a business’s plan for how to work towards attaining a higher market share within an existing product market. 

The aim is to aid business growth, sales, and competitiveness against similar competitors in the space, becoming market leader. The key differentiator here that sets market penetration aside from other growth strategies is that market penetration is all about growing and positioning yourself competitively in an existing market, not a new market. 

Later on, we’ll be sharing the top market penetration strategies and techniques with you, but first, let’s make sure we’ve really understood what market penetration is about. 

The difference between market share and market penetration

Oftentimes people use the terms market penetration and market share interchangeably. But they are not exactly the same thing. 

Market penetration, as a measurement, refers to the percentage portion of a business’s target market that they capture over a set period of time. 

Market share, by contrast, refers to the percentage portion of the total market value that is captured by a business over the same set period of time. 

What is penetration rate?

We can calculate market penetration as a measurement by using this equation:

penetration rate

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The more accurately you can assess your number of customers and market size (TAM) the more accurate your Market Penetration Rate calculation will be. This is not always easy. Especially if your target market is quite broad and widespread. In cases like these it’s often best to hone in on your most relevant target market and take it from there. 

Average market penetration rates vary depending on the type of product being marketed. In general, consumer products realize market penetration rates of between 2% and 6% whereas business products tend to penetrate the market at a rate of between 10% and 40%. 

Ways to boost market penetration

All businesses want to achieve high market penetration rates to remain competitive within their target product market. Fortunately, this doesn’t have to come down to just sheer luck. There are targeted approaches that businesses can take to boost their levels of market penetration and sustain long-term growth year on year. Let’s take a look at some of these below. 

Price adjustments pricing to appeal to new audiences

One way in which businesses go about boosting their market penetration rates is to mobilize a targeted pricing strategy. Adjusting product and service pricing scales up and down periodically means that your products have the opportunity to appeal to different audiences. This technique is a well-known marketing diversification strategy that goes by the name of penetration pricing. 

Typically this involves lowering prices when they are first launched to attract a wider pool of new customers who might otherwise be priced out. Whilst the price is low, it’s easier to penetrate the market, build brand awareness, and gain customers from the competitors also selling in that space. Hopefully, once customers get to know and love your product, some of them will keep purchasing even once the price rises to the normal RRP. 

price adjustments pricing

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Channeling further investment into marketing

Another tried-and-tested way to boost marketing penetration is to invest more funds into your marketing campaigns. By employing an omnichannel market development strategy

 and making sure that your brand messaging, voice, and image is just right, you’ll generate increased interest, engagement, and trust in your brand that is more than likely going to increase your market share and entice some customers away from the competition. 

Once you’ve launched your marketing campaign, don’t forget to make use of all that data. Collating all those metrics from disparate channels can seem like an impossible task, but it really need not be. Tools like Affise BI help you manage all that unstructured data across different marketing channels intuitively. You don’t need any technical expertise to benefit from Affise BI and start making better, evidence-based business decisions every day.  

Updating your product 

Market penetration is all about acquiring more of your market and that means acquiring customers from your direct competitors. In order to entice people who are already loyal to your competitors over to your business, you’ll need to differentiate your products from the competition. 

This means making your products a little bit different, or in some way better. By offering the most innovative and attractive products and services in your space, you’ll win new customers and increase your market share in the process. 

Acquisitions or partnerships with other companies in your space

Sometimes teamwork is the key to success. Mergers, acquisitions, and partnerships with other companies sharing the same market space can help businesses grow. You’ll benefit from their brand reputation and ready-made customer following. 

This kind of collaboration is a great way to achieve rapid growth and expansion. The best partnerships exist between companies that each have something to offer one another. Perhaps you have a product feature that your partner wants to add to their product line in the future (and vice versa). Hey presto, you’re helping each other grow and expand in your product space. 

Using a tool like Affise Reach can help you find the perfect business partner. Once you have, ensure that you’re equipped to effectively share data between your respective systems. After all pooling information is what partnerships like these are all about, right? Affise’s data transfer platform, CPAPI, makes it super easy to transfer, synchronize, and automate data connectivity between systems and will help you start building brand awareness from day one.

12 market penetration strategies you must know

Before we set you off on your very own market development campaign, let’s make sure we’ve got all the groundwork covered. Before taking a company’s product to market it’s important to set aside some time to develop a robust market penetration strategy. Once you’ve established your key goals and aims, identify the processes that are going to help you get there. 

Not sure where to start? 

No problem, these 12 market penetration strategies will help you get off to the best start possible. 

1. Lower prices

We’ve already discussed how bringing new products to market at a lower-than-average price point can help boost market penetration. But that’s not the only way to achieve success. Pricing is one of the single most important factors influencing market movements, so it’s important to remain on the ball at all times. 

Stay abreast of your competitors’ products and pricing strategies and ensure that your products and services are always priced competitively for optimum market penetration. 

Pricing techniques that help increase market penetration include:

  • Price drops – if your product isn’t gaining traction in a competitive market, entice customers over with low prices.
  • Payment plans – if you’re offering a service with a monthly subscription fee, look at the data and identify whether monthly or annual payments are best for your market share. 

2. Discounts & promotions

As well as adjusting your standard pricing, it’s worth devising some targeted discounts, offers, and incentives that will encourage prospects to engage with your brand over your competitors. 

There are so many different types of offers out there from buy-one-get-one free deals (BOGOF) to flash sales and product giveaways. The possibilities are endless. Offering something as seemingly benign as free shipping could be enough to close those first sales. 

Popular discount and offers that help increase market penetration include:

  • Discounted products
  • Competitions
  • Flash sales
  • Loyalty rewards
  • Free shipping 
  • One month free 

A great way to structure your discounting strategy is to use the FIFO method. FIFO stands for first-in-first-out. In other words, when it comes to inventory, you want the oldest items in stock to be the first to go. If stock is proving hard to shift, it’s worth applying a discount to existing products in order to help them move off the shelves faster and boost sales volumes.  

3. Aggressive advertising

Advertising is critical to achieving good market penetration. When companies launch products into competitive and already saturated markets they often fall on aggressive marketing techniques as a way to reach the broadest market segments possible. 

The advertising techniques you choose will depend on the type or product or service that you are offering. In general, it’s best to combine a range of different advertising mediums to establish the greatest reach. Digital advertising is a must, but you may also wish to utilize some traditional ad forms too. Let’s take a look at some of the best options at your disposal. 

Traditional advertising techniques:

  • Television media 
  • Billboards 
  • Flyers 
  • Newspaper/magazine ads

Digital advertising techniques:

  • Paid-per-click (PPC) ads
  • Social media ads
  • Content marketing
  • Email marketing
  • Mobile marketing

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4. Increase usage

Another way to bolster market penetration is to try and increase product usage within your existing customer base. This might seem counterintuitive at first but it’s actually pretty effective. As existing users within the current market start to enjoy the benefits of your product in full they are more likely to act as advocates for your brand, helping you in turn to capture onboard new customers.

5. Adding new features

We already touched on the importance of differentiating your brand from the competition. Differentiation can be realized in many different ways from pricing to branding to epic customer service. One of the best ways to differentiate your product or service from those that already share your target market is to add new and innovative features that customers cannot find anywhere else. 

For example, if your competitors aren’t delivering 100% fulfillment on all of their orders then this is something you can work on to set yourself apart. At this point, you might choose to mobilize an amazon fulfillment center or follow the lead of Apple to improve your distribution channels and stand out from the crowd. 

By offering something that is otherwise unavailable you’ll be able to penetrate more of the market and capture consumers from your competitors. A great way to ensure that you’re consistently adding competitive features to your current product offerings is to engage in regular consumer panels, surveying, and communication. Ask your target market what they want and need (and what other brands out there are failing to provide) then give them exactly that.

6. Innovative marketing

As well as a more aggressive advertising campaign, you’ll want to incorporate as many innovative marketing practices and strategies as possible too. 

The key to reaching as many potential customers as possible is to employ an omnichannel digital marketing strategy across multiple platforms. This will solidify your brand’s standing in the market and generate more engagement with your products, services, and brand identity. 

Furthermore, consistent branding will keep your existing customers engaged and stop other brands from capturing customers from your market share.

Top marketing strategies include:

  • Social media marketing 
  • Search Engine Optimization (SEO) 
  • Paid ads (such as on Google or Facebook) 
  • Video marketing 
  • Affiliate marketing 
  • Influencer marketing 
  • Email marketing campaigns 
marketing strategies

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7. Dealerships and partnerships

As we touched on just a moment ago, forging partnerships and dealerships with other businesses can be incredibly advantageous when it comes to achieving high levels of market penetration. This is particularly true when partnering with a company that already has a well-established market niche and a loyal base of customers who trust the brand. 

That niche could be anything from a particular service, or even expertise in a specific geographical area. Common examples of brand partnerships like this include deals made between electronic goods manufacturers and online retailers. Think about it. Most of us buy branded electronic goods from third-party retailers, not the manufacturing company themselves.

It’s never been easier for brands and agencies to partner up. Tools like Affise Reach are creating interconnected spaces where brands can connect and forge effective partnerships. Through these partnerships, businesses can then enlarge their target audiences and achieve sustainable long-term growth. 

8. Resellers

Resellers are businesses that buy products directly from a manufacturer at below market value, with the intention of re-selling said products for a profit. Reselling is an effective way to forge a place for yourself within an already competitive market. In order to compete with more established brands, resellers nurture customer relationships with optimized services and customer support that serves to capture more customers from the competition. 

9. Influencer marketing

Influencer marketing is a marketing methodology that involves companies partnering up with well-known public figures or influencers. By partnering with an influencer who shares your business’ target demographic, you’ll benefit from a ready-made funnel of incoming customers. 

Influencers recommend products and services, reinforcing the reputability of the brand they are endorsing. Influencer marketing allows businesses to tap into a ready-made community of potential onboards in exchange for a percentage of each sale made via their affiliate link. 

influencer marketing

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10. Integrated marketing

An integrated marketing approach is a super effective way to support market penetration. Integrated marketing is essentially any marketing campaign with a unified and consistent message that appears across all marketing channels. 

Consistency sells. Consistent messaging and imagery make a brand more recognizable, trustworthy, and memorable for prospects. So make sure you’re delivering a unified and consistent experience in all of your marketing campaigns that aligns with your brand values, aims, and aspirations.  

11. Field marketing

Field marketing is a particular type of market research that involves brands testing out their products and services directly with real-life consumers. Typically brands organize these field-research events on campuses, malls, and retail locations. 

The idea is to support product development by learning from customer feedback whilst building brand awareness and targeting specific locations to increase sales. During a field marketing campaign, brands might engage in activities such as:

  • Offering customers product experiences
  • Roadshows 
  • Product samplings
  • Sales promotions 
  • Direct selling on location
  • Guerilla marketing techniques

This comprehensive approach to marketing is a fast way to generate buzz around a product and ensure that customers are talking about your brand as it enters the market.  

12. Thwart the Competition

Finally, and most important of all, you’re going to want to quash the competition. That is, after all, what market penetration is all about. No playing nice here. Remember what we just said about differentiation? Well, that’s going to be your best friend. The best route to epic market penetration is offering features that your competitors simply cannot replicate themselves. 


Ready to start growing your business. Market penetration is one of the most important growth strategies out there when bringing new products to an existing market. By implementing these top 12 strategies you’ll be sure to stay abreast of the competition and capture more customers.

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Affise Academy

Affise is a partner marketing platform for brands, advertisers and agencies to scale via all possible performance marketing channels. Synergy of technology and our long standing experience lets you expand your partnerships, automate every step of the campaign lifecycle and make data-driven decisions.

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