Typically, market penetration strategy comes in the picture when you are marketing and selling current products in the current market. Market penetration strategy is needed when you are looking at the product market expansion grid. Thus, the current market might already be saturated, or it may have high competition or your current product has low turnaround time. In such case, what can be your strategy to increase market penetration? Here are 6 tactics to increase market penetration.
Price penetration – The oldest trick in the book is to drop the price of the product thereby possible increasing the attractiveness of the product and taking on the challenge of the competitor. However, the implications of price drop are manifold. If you drop the price, than your margins will drop. Otherwise, you have to do some modifications in the product so that the price is less and you don’t suffer in margins. If these modifications are done, is the product still good? Thus, price penetration is not so easy and requires a lot of thinking before the strategy is implemented. Price penetration will also affect the brand and positioning.
Increase promotions – Another tactic for market penetration strategy is to increase the promotions for the product and thereby increase the pull strategy for the product. However, just plain old promotions might not work at times. You will have to give offers and schemes to the customer to rope them in. By giving trade discounts, sales promotion discounts, and any such additional benefits to the customers along with promotions will ensure that you penetrate the market better.
Increase reach – If your product is channel driven, than increasing the reach of your product is the best market penetration strategy to sell better than the competition. The way to do this is to find more channel dealers and channel partners. The trick here is to keep the channel partner motivated at all times to do business with you. By increasing the reach, and having your products everywhere through channel dealers and retailers, you ensure that the customer does not miss out on your product and is sure to get your product wherever he goes, which is another sure shot way for market penetration.
Increase usage – By increasing the usage of a product, you can increase its consumption thereby penetrating the market even further. Thus, if people start eating a packet of chips more often because these chips are marketed heavily in the area, the higher consumption will increase the market penetration.
Attract competition customers and dealers – The cola wars are the best example of attracting competition customers. By dropping the price in a given area for the distributor or targeting the existing dealers of competition products, you can increase your market penetration by decreasing the quantity of competition products sold.
Non users to start the product – Encouraging non users to start using the product is a tough task and this is where the marketing department steps in. Smaller refrigerators or mini bars in bedrooms where not the norm. But by product placement strategies and by increasing awareness, many people have started keeping mini bars in their bed rooms thereby making non users as “users” of the product mini bar.
Thus, there are numerous market penetration strategies and tactics. However, these tactics will implement best when you use multiple tactics together. Like increasing the reach of the product should like be accompanied with increasing the promotions. By increasing the promotions, you are increasing the usage and also attracting competition customers.