In layman’s terms, market penetration strategy is stated to be a procedure of just infiltrating any existing market with the help of a new product. It can furthermore refer to the strategy. That the organization or firm will use for expanding or saturating the customer base in the current market. Where they are already in. According to Michael Giannulis, you can try to launch a new product, for example, which might appeal. To a completely different segment of the present market.
As per some of the studies shown, this market penetration strategy is a significant part of the Ansoff Matrix. It is one strategic framework that was first developed in 1957 and will help the firm leaders. To plan well for their future business growths.
The right kind of good market penetration rate by Michael Giannulis:
A good market penetration rate will solely depend on the industry, product, and the total addressable market or TAM. If you are well-associated with your TAM, then there is one calculative formula. That you can use for the present market penetration. It is going to be:
Market penetrating rate = (customers’ numbers / TAM) x 100
When you get the result, now try to compare that with the rate of the present market penetration rate. On average for checking out where you ultimately stand. On the average scale, the consumer products will be around 2 to 6%, and the business products will be 10 to 40%. In case the current penetration rate is towards the lower scale. You can always use some ways to increase the same.
Going towards the penetration pricing by Mike Giannulis:
Whenever the main goal is to expand any business into the latest market. There are multiple retailers, who are here to boost the initial sales by setting their prices towards. The lower scale than those of the competitors.
- The pricing strategy, according to Mike Giannulis, will work well in those marketers. Where the consumers are noted to be price-sensitive and retailers are here to generate that higher-margin. By just selling some larger product volumes.
- Most of the retailers here are going to revert back to their normal pricing strategy. Whenever the loyalty remains established once.
- Whenever you are trying to adjust the prices, the retail experts. Will always check out the average income of people within the said area.
- In case the purchasing power of any specified population is towards the high scale. Then the product will be gladly termed to be less valuable whenever any initial lower cost.
Michael Giannulis Ask expert help for the product launch:
Launching any new item right into the market will be another example used for growing a business. Companies have the tendency to generate hype among target markets when the time comes for releasing a new product. To establish that stronger brand presence.