When creating a business strategy for market penetration, it is important to define and describe the characteristics of a market. To be effective and profitable, a market must be defined, researched, and then exploited. A market is not a single entity. In fact, there are many market segments and sub-segments within each market.
Some examples of sub-segments are Personal Service, Commercial Services, Energy and Utilities, and wholesale/dropshipping. Each sub-segment within a market can have its own unique characteristics.
Good market penetration varies when it comes to marketing campaigns and overall expansion. Some companies think about market penetration as simply reaching out to as many people as possible. They try to promote their brand as much as possible to each person they come in contact with. This is the wrong way to expand a business!
Instead, we should think about market penetration of reaching out to as many customers as possible within your market. Now, this may sound like a complicated idea. It is, but it should not be overlooked.
Many great marketing ideas will reach people outside of your company that aren’t necessarily your own customers. For example, let’s say that you’re a cleaning service. The idea would be to advertise in local job search publications, and offer-free customer service at local businesses, and bring in new customers.
This doesn’t mean that these are bad ideas. They’re just concepts that need to be thought through carefully. It would help if you didn’t go overboard, though. There isn’t one perfect strategy that will work in all situations.
The right approach, though, will give your company the best chance of expanding into a successful niche.
A lot of businesses forget when they’re expanding to reach out to their existing customers. There is a general misconception that customers outside of their target market won’t care about what they buy.
This is simply untrue. People who already frequent your business will be more likely to purchase your products because they’re already familiar with your style of doing business.
If you can’t get these people to stop by, though, you have a problem. Try offering special offers or discounts to people who live near your facilities. Perhaps you could offer an anniversary discount or other type of special arrangement. Offering incentives to people who already frequent your place of business can have a beneficial effect on overall revenue.
One way to expand your business is by using the internet. Internet penetration is increasing dramatically in many countries, and it’s relatively inexpensive to add an online presence. Use sites such as YouTube to film demonstrations of your product and create your own website to let potential customers see what you offer. Once you have an established web presence, you can easily expand through word of mouth and market penetration examples like those previously mentioned.
Another way to keep customers happy is to provide excellent customer service. After all, your customers may spend several hours a day at your location. It would make no sense to them to have issues or complications with the product or service that could be easily resolved.
Offer to resolve their problems right away. Keep your employees well-trained in how to deal with customers. It can be very costly to hire additional staff to deal with dissatisfied customers if you do not have in-house staff to handle such issues.
Look into alternative forms of advertising that are likely to attract your target audience. While television advertising is relatively commonplace, it may not be effective for many customers. Likewise, radio advertising may not be an option for many.
One of the best options for expanding your market is to develop online marketing strategies such as social media marketing. Popular social media sites include Facebook and Twitter. With many people are spending a good deal of time online, these sites provide an excellent opportunity to expand your client base.
Once a market segment has been identified, we can further break it down. The most common definition is identifying the percentage of the market covered by the product or service. We can then break this percentage down into other smaller areas.
This will give a company a starting point for defining the overall penetration strategy. It is important for a marketing strategy first to identify the market penetration target market and then target the sub-segment within that target market.
While some companies may already have an idea about the sub-segment they need to expand into, others may not know. A market penetration study that analyzes over one market will give an accurate breakdown of potential sales opportunities. When a company expands into a sub-segment, it considers a variety of factors.
One such factor is whether the market being targeted is growing or contracting. If one market is expanding, the company must determine if it will keep its existing customers while also gaining new customers at the same time.
Other factors that affect a sub-segment include competition from similar businesses. If the market is targeted as a growing market segment, the company must determine the advertising techniques and strategies that will prove most effective.
Some sub-segments are geographically specific, while others, such as electronic sub-segmentation, do not have a specific trend or lifestyle that indicates trends in behavior. This can make it difficult for a marketing manager to predict what advertising will most appeal to potential customers.
When expanding into a sub-segment, the company must consider how it will position itself to be most appealing to that market segment. This requires research into what types of advertisements will be most attractive to that segment.
Since it turns some customers off by commercials, changing the content of the commercials or the timing of the commercials can often influence the outcome of the advertising campaign. Also, the use of different media can help increase market penetration for sub-segmented markets.
Other factors may affect a sub-segment’s level of interest in a product or service. Sub-segmentation can provide a unique opportunity to gain access to customers that would not have been possible with a larger market segment. For example, if a company operates in two separate locations, likely, each location would only attract a certain percentage of its target market.
By grouping related sites together, that percentage of potential customers can be expanded. By analyzing consumer behavior, market trends, and location preferences, marketers can expand their reach without expanding their actual physical locations. This allows the company to create a more customized advertising experience for each sub-segmented site.
Market penetration is important because it affects an organization’s ability to create a profit. Because each sub-segment of the market is independent of the others, differences in profitability can affect profitability. Market penetration can help determine the success or failure of a company’s expansion strategy.
Market penetration studies allow companies to pinpoint where they need to improve to increase profits and reduce expenses. Sub-segmentation provides a unique opportunity for companies to differentiate themselves from competitors and increase their market share.