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How To Develop An Effective Market Penetration Strategy

Posted by | 19 December, 2011 | Business planning, Project management, Startup marketing, Startups, Uncategorized

Original post by Maria Bike via Task 

It is very common that we talk about market penetration in a company. We even have targets in our annual business and marketing plans to achieve higher penetration. Consider the following advice before making your decision on how to implement an effective market penetration strategy.

Think and calculate before you make your decision. There are a few issues to consider before you decide if you really need to apply a market penetration strategy at your company’s current stage. Furthermore, you must think about where you are and if “penetration strategy” is the appropriate strategy amongst other possibilities.

Ask yourself the following questions.

  • Why do I need higher market penetration?
  • Do I need it in order to increase total profitability?
  • Do I need it in order to increase profitability per product line?
  • Do I need it to secure profitability?
  • Do I need it to survive in the market situation?
  • Is it necessary for my immediate or future development?

If you decide a market penetration strategy is called for after answering these questions, start drawing up business scenarios and calculations. Before moving to action, you have to think about and calculate whether or not you can gain the additional market share with the same products and structures. Decide what sort of investment you need to make.

Since a new marketing strategy implies expensive investments that will not be translated into profits for a reasonable time span, you should reconsider the approach of your market penetration strategy. For example, if you have to design new processes or train a lot of people or advertise heavily, you need to estimate in advance what your return on investment is expected to be. Of course, you also need to designate a specific budget and time plan that will be monitored.


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