Advantages Of Market Penetration

Market penetration strategy

The main role of this strategy is to concentrate on the selling of the already existing services and products into the market so that market share can be increased. Because this strategy has low risks involved, so many organizations consider this in their organizations.

It involves selling the product and services to the already existing customers and to new customers who are dealing in the same market place. For example, if the current clientele is of the company is majorly aged between 16 and 25, then this strategy is effective and successful when it is selling the product the same age group.

One of the key limitation is that the company cannot compromise it current success at the cost of trying to grow in the

 Current client usage to be increased.

Key points:

 Market penetration concentrates on selling the existing products into the current market so that higher market share can be achieved.

 There are 4 different ways to achieve this: market share of the current product and services to be maintained or increased; all the existing and new competitors to be driven out by restructuring the market; dominance of the growth markets to be secured; usage to be increased with the help of current customers.

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Market development strategy

A market development strategy helps to sell the existing products and services into the new market. In different ways this strategy can be achieved:

 New geographical markets

 New product dimensions or packaging

 New distribution channels

 New market segment created by different pricing

Key points

 A market development strategy helps to sell the existing products and services into the new market.

 It has four different kinds of strategies that can help to achieve this: new geographical markets; new product scopes and its packaging; new channels used for distributions; with the help of new pricing, new market segments can be

In addition to this, the annual reports can also help to discover the benefits of adopting this strategy. The information and understanding of the potential investments and market forecast from the perspective of existing competitors can be very helpful to enhance the diversification strategies.

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Generally, market diversification focuses on the areas which are not one of the company’s core competencies defined in its portfolio. So stakeholders involved in the decision making for implementation of diversification strategies know the discomfort of the risk involved when working outside their knowledge base. To manage to get succeed in the diversified market, a company should be able to match the R&D of their competitors.

Diversification normally can be seen at two level of the organization. Either at an organizational level or at business unit levels. In a former level, one can most likely to see the integration or merging or new organization into its existing one. At business unit level, organizations normally expand into new segments of its current operating