Taking into consideration that the term market penetration is defined as a strategy of increasing sales of existing products into current markets, the analysis of the factors with influence over the costs to achieve the significant market penetration a company is looking for includes:

  • Market penetrationThe company’s marketing strength
  • The possibility of having access to low cost materials as well as to effective production
  • The experience of your company
  • The consideration of problems related to the introduction such as lack of adherence to industry standards, unavailability of materials, poor quality control, regulatory problems and the inability to properly and sufficiently explain the benefits of your company’s products or services to the prospect.
  • The enterprise infraestructure which comprises its organization, recruiting policies, employee benefit programs, customer support facilities and logistical capabilities.
  • Distribution effectiveness including history of relations, the extent of channel utilization, financial stability, reputation, access to prospects and familiarity with your products or services
  • Technological efforts
  • Availability of an adequate operating capital

The strategy of market penetration is considered as the possibility of growing through achieving a higher market participation on the products and the markets the company currently operates. There can be three different ways to carry out this strategy of market penetration:
a) the current clients purchase more of your products and services
b) attract clients from your competitors
c) attract new potential clients that are not actually consuming your products or service.

This is a strategy of market penetration may take place by means of internal growth, which means by opening new stores, or by means of external growth by purchasing or joining competitor companies. The strategy of market penetration is highly used by commercial distribution companies as it means a lower risk because it has to do with running the basic business and the company has great knowledge about it.

Roe Smithson & Asociados are specialists in market research in South America in different approaches to the modelling of the market penetration of new goods, processes and brands as well as it explores the major factors in the decision-making process by which customers select one brand over another. It also measures the depth of consumer preference and satisfaction for the benefit of your company.

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