Market penetration is one of the four growth strategies as defined by Ansoff. Market penetration occurs when a company enters/penetrates a market with current products. The best way to achieve this is by gaining competitors' customers (part of their market share). Other ways include attracting non-users of your product or convincing current clients to use more of your product/service (by advertising etc). Igor Ansoff (1918-July 14, 2002) was an applied mathematician and business manager. ...
Other growth strategies include:
Product development (existing markets, new products): McDonalds is always within the fast-food industry, but frequently markets new burgers.
Market development (new markets, existing products): Lucozade was first marketed for sick children and then rebranded to target athletes.
Diversification (new markets, new products): Mohen A.S, Bion Products, Selectron Ltd,
The penetration that brands and products have can be recorded by companies such as ACNielsen and TNS who offer panel measurement services to calculate this and other consumer measures. In these cases penetration is given as a percentage of a countries households who have bought that particular brand or product at least once within a defined period of time. Product Development is the process of development of products. ... Market Development is when a company seeks new markets with its present product portfolio. ... Diversification is a measure of the commonality of a population. ... ACNielsens Logo ACNielsen is an international marketing research firm, based in Schaumburg, Illinois. ...
Penetration pricing is the pricing technique of setting a relatively low initial entry price, a price that is often lower than the eventual market price.
Penetration pricing is most commonly associated with a marketing objective of increasing market share or sales volume, rather than short term profit maximization.
An interesting variant of the price penetration strategy is the bait and hook model (also called the razor and blades business model) in which an initial product is sold at a very low price but subsequently purchased products (such as refills) are sold at a higher price.
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