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6 Steps to Building a Successful Market Penetration Strategy

Marketing penetration strategy is an essential part of every successful business. Check out 6 tips on how to create an effective market penetration strategy.

What is Market Penetration?

Market penetration refers to the process of increasing the market share and sales of a product or service within an existing market. It involves attracting new customers and encouraging existing customers to make repeat purchases through various tactics and approaches.

The goal of market penetration is to gain a larger portion of the target market and establish a competitive advantage. Market penetration is both a measurement and an activity, but it is important to distinguish between the two.

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Market penetration as a measurement

Market penetration as a measurement is the calculation or assessment of a company’s market share or the percentage of the total target market that a company has captured. It helps evaluate the success of a company’s efforts to penetrate and gain a foothold in a specific market.

This measurement provides insights into the company’s position in the market and its ability to compete effectively against other players. Market penetration measurement is expressed as a percentage and can be calculated using the following formula:

Market Penetration (%) = (Number of Customers or Sales in a Specific Market / Total Potential Customers in that Market) x 100

Market penetration as an activity

Market penetration as an activity refers to the process of implementing strategies and tactics to increase a company’s market share within an existing market.

The goal is to attract new customers and encourage existing customers to make repeat purchases, ultimately solidifying the company’s position in the market. Market penetration activity is achieved through the implementation of a market penetration strategy.

Market Penetration Strategy for Retailers

Market penetration strategy is a deliberate approach adopted by companies to increase their market share and sales within an existing market.

Companies utilise market penetration strategies to gain a competitive advantage and solidify their position in the market. These strategies can include:

  • aggressive pricing to attract price-sensitive customers
  • promotional activities to create awareness and generate demand
  • product innovation to meet evolving customer needs
  • proactive pricing to stay competitive
  • increasing brand awareness to build customer loyalty

A solid market penetration strategy can be a game-changer for the company’s destiny. Market penetration strategy allows you to effectively compete in a highly competitive marketplace. By implementing strategies such as dynamic pricing, promotional activities, and innovative product offerings, you can differentiate yourself from competitors and attract customers.

Market Penetration Strategy Examples

For a market development strategy to be successful, the strategy should be tailored to the specific needs and goals of your company or product. Let’s have a look at how the following companies used market penetration strategies in their favour.


Amazon’s market penetration strategy is multifaceted and encompasses several key components. They employ an aggressive pricing approach, ensuring that their products are competitively priced to attract customers.

Additionally, Amazon focuses on expanding into new markets, constantly seeking opportunities to enter emerging sectors such as streaming services and smart devices. This allows them to diversify their offerings and reach a broader customer base.

By utilising various strategies, such as targeted advertising campaigns and promotional activities, they aim to build brand loyalty and attract more customers to their platform.


McDonald’s is known for its strategic approach to attracting customers. In addition to regularly providing discounted meal deals that offer great value for money, McDonald’s also invests in extensive advertising campaigns to create widespread awareness about its offerings.

This ensures customers are well-informed and have a wide range of options to choose from. Moreover, McDonald’s is constantly innovating and introducing new menu items to cater to the ever-changing preferences of its customers.

How to create a market penetration strategy

At Assosia, we have extensive experience in creating effective market penetration strategies. Contact us to learn more about our services and how we can support your market penetration efforts.

To create a market penetration strategy, you must analyse and understand your target market, identify competitive advantages, and develop a comprehensive plan aligned with your business objectives. Here are the steps you should implement:

1. Dynamic Pricing

Dynamic pricing is a key component of a market penetration strategy. It involves adjusting prices in real-time based on various factors such as demand, competition, and customer behaviour. The goal of dynamic pricing is to optimise revenue and maximise market share by offering the right price at the right time.

Offering discounted prices during off-peak hours or running limited-time promotions can incentivise customers to make a purchase. This strategy not only helps attract new customers but also encourages existing customers to make repeat purchases.

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2. Create Promotional activities

Promotional activities are designed to create awareness, generate demand, and attract customers to your product or service. By effectively promoting your offerings, you can increase market share and gain a competitive edge.

Promotional activities take various forms, including advertising campaigns, sales promotions, discounts, contests, and partnerships. The key is to identify the most effective channels and tactics to reach your target audience.

By delivering the right message to the right people through the right channels, you can effectively promote your offerings and increase market share.

3. Seek New Markets

Seeking new markets identifies untapped market segments and expands into new geographical areas to attract new customers and increase market share.

By exploring new markets, you can tap into different customer demographics, preferences, and needs. This provides an opportunity to tailor your products or services to meet the specific demands of these markets, ultimately attracting a larger customer base.

To successfully seek new markets, you should conduct thorough market research to understand the target audience and competition in these markets. This includes analysing market trends, consumer behaviour, and potential barriers to entry. By gaining insights into these factors, you can develop effective strategies to penetrate and establish a foothold in new markets.

4. Innovate products

By continually innovating products or introducing new variants, you attract the attention of existing customers and capture the interest of potential new customers.

Innovation includes improving existing products, developing new features, or creating entirely new products that cater to evolving customer needs and preferences. Innovation can also involve collaborating with partners, suppliers, or even customers to co-create new products or enhance existing ones.

5. Proactive pricing

Proactive pricing involves setting prices strategically to attract customers, gain market share, and stay competitive.

With proactive pricing, you monitor market trends, competitor pricing, and customer behaviour to determine the optimal price points for their products or services. The goal is to offer attractive prices that incentivise customers to choose their offerings over competitors.

However, it’s important to note that proactive pricing should be implemented carefully to avoid engaging in price wars or devaluing the brand. Consider factors such as production costs, profit margins, and long-term sustainability when determining their pricing strategies.

6. Increase Brand Awareness

By effectively promoting and creating visibility for your brand, you can attract more customers and gain a competitive edge in the market.

Brand awareness refers to how familiar and recognisable your brand is among your target audience. It ensures that your brand name, logo, and messaging are easily identifiable and associated with your products or services. When customers are aware of your brand, they are more likely to consider it when making purchasing decisions.

Assosia’s services including merchandising and point-of-sale placement audits, can support your brand awareness initiatives by ensuring your products are prominently displayed and effectively showcased in retail environments.

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Assosia’s services including merchandising and point-of-sale placement audits, can support your brand awareness initiatives by ensuring your products are prominently displayed and effectively showcased in retail environments.

Do Market Penetration Strategies Increase Market Share?

Market penetration strategies, when executed successfully, can lead to increased market share. Capturing a larger percentage of the target market enhances your market position and potentially allows you to gain a larger share of customer spending. This can result in increased sales, revenue, and profitability.

By leveraging Assosia’s services, you will have access to a team of experts who can assist you with product penetration from the very beginning.


Market penetration involves increasing market share and sales within an existing market. It requires attracting new customers and encouraging repeat purchases from existing customers.

Check Assosia today to learn more about our services and how they can support your business in building a solid market penetration strategy.