#Penetration pricing strategy example how to
#Penetration pricing strategy example update

#Penetration pricing strategy example update

Some companies may decide to update their products as a strategy to increase their penetration of the market. Related: What Are Mergers and Acquisitions? (Examples and Benefits) Product updates Some companies may choose to maintain the previous brand names and reputation, whereas others may choose to incorporate all their products and services into a single brand. In both cases, the companies can combine their market shares to gain a higher market share. In contrast, an acquisition is when a company buys one of its competitors and incorporates the competitor's brands into its own organisation. A merger is when two companies combine to create a new one. Mergers and acquisitions are common strategies that many companies employ to increase their market penetration. Related: 12 Marketing Careers with Salary and Job Duty Expectations Mergers and acquisitions Many brands may also use market penetration marketing and promotions in combination with pricing. Some companies may appeal to the emotions of potential customers through marketing campaigns. Brands can also use marketing and promotions to achieve brand loyalty. These strategies increase brand awareness, which can be important for gaining more customers and more market share. Some brands may achieve market penetration by increasing their advertising efforts or promotions. A common method that some brands use is to offer better prices for their products and services compared with their competitors until they have a high market share. This doesn't always mean cheaper because market penetration pricing adjustments can also include offering a new type of payment plan or providing more value for the cost. For a company to take market share from another that already has a customer base, their product can either be of better quality or be available at a lower price. Here are some common strategies that companies use to increase their penetration of the market: PricingĪdjusting pricing is a common strategy to increase market penetration. Related: What Are Porter's Five Forces? (With Definition and Examples) Types of market penetration strategies This may be beneficial in the long term, helping the company to reduce the number of competitors it may face as the market develops. Reduced competition: Using a strategy for market penetration to target an emerging market can enable a company to build a stronger brand. Increased revenue: By acquiring new customers, a company can also increase its revenue, helping it to achieve its business goals. Here are some of the main benefits that using such a strategy may result in for a company:Ĭustomer acquisition: Market penetration is a useful strategy that can help a company gain new customers from a market or demographic that it may not have accessed previously. Understanding the benefits of using a strategy to increase market penetration can help you make a better-informed decision about whether to implement one for the company. Related: What Is a Market Development Strategy? (Definition and Tips) Benefits of a marketing penetration strategy The company may use penetration strategies to gain more customers and grow its market share in markets where its share is lower. A company can calculate its share of different markets to identify markets where its market share may be lower. A company's market share refers to the percentage of the total revenue in a particular market that the company earns. Market penetration strategies are business plans that companies can implement to help them achieve their business goal of increasing revenue. In this article, we examine several different types of strategies that companies can use to increase their market share, show you how you can create one of these strategies and provide an example of a company using such strategies.

#Penetration pricing strategy example how to

Understanding how to use market penetration strategies effectively can help you improve your performance in your role at work. A market penetration strategy is a technique that a company can use to gain more customers for its products and services. A common business objective for many companies is to increase their revenue by widening their market share to acquire new customers.