 Market Penetration

This strategy focuses on acquiring a larger market share by increasing the

sales of its existing products in its existing market.
Businesses can adopt strategies of competitive pricing or aggressive
marketing to achieve its market penetration goals

Market penetration

So, you don't want to add new products or services to your portfolio nor do
you want to tackle new markets? Then market penetration is the right
strategy for your company's growth. Growth is achieved by taking more
customers away from the competition in the existing market. Another part
of this strategy is to increase sales through your existing customer base,
i.e. to motivate your customers to purchase more frequently. For both
factors, it is necessary to implement new marketing strategies. Sales
training is also recommended, especially to increase sales through existing
customers.
Even if you can win over additional new customers, the growth is limited by
market penetration, since the number of customers within a market is
limited.
Several things have to be considered when adopting the Market penetration
strategy. By using market penetration, you are ensuring that only the existing
resources of the firm are used and no extra costs need to be incurred in
setting up a new unit for .There needs to be a combination of marketing and
sales promotions if you have to grow in an existing market with an existing
product.

On the other hand, market penetration might not be the strategy you are
looking for. What if the market becomes too saturated? Fighting for a higher
market share in a saturated market accounts for higher expenses and
lower profitability. Thus the market analysis needs to be spot on and the
market penetration strategy should be adopted only if there is scope for
increasing market share in an existing market.
Of the four strategies, market penetration is the least risky while
diversification is the riskiest.

EXAMPLE

1. Samsung’s Market Penetration

Samsung seeks to grow with its existing products in every market the company
operates. While market penetration seems to be the least risky of all growth
strategies as it allows Samsung to leverage its existing capabilities and resources.

Samsung opts for market penetration to increase its market share.

In growing markets, Samsung launches its market penetration strategy to increase

its existing market share. The company adopt aggressive marketing and
promotions, offer competitive pricing etc. to eat into its competitors market share.
For instance, Samsung drops the prices of its smartphones a few months before the
launch of its next model Galaxy s10.

This allows Samsung to acquires new customers, increase its market share and at
the same time clear its old stock prior to the launch of its latest product line.

However, the market penetration strategy has its limitations as once a market
approaches a point of saturation, the growth halts and Samsung will require to alter
its growth strategies and opt for other growth strategies within the Ansoff Matrix
of Samsung to continue its growth.
2. Brands such as Coca-Cola is known for spending a lot on marketing in order
to penetrate their markets. In addition, they try to maximize the use of
distribution channels by making attractive deals with a large variety of
distributors such as supermarkets, restaurants, bars and football stadiums
for example.