Your business idea can flourish with a smart strategy to get market penetration better. The aim is to market an existing product or service more successfully than its competitors.
Factors for the success of the business idea include your marketing strategy, the bargaining power of the market participants and the location. It is therefore important to illuminate the market very precisely when it comes to market penetration.
Market penetration: Better marketing business idea
You can also successfully become self-employed with an existing product or service. There are the following options:
1. Growing up: Taking advantage of growth opportunities
They benefit from a “natural” increase in market penetration and grow with the market. It is important that you observe industry trends and know what future growth rates you can expect (Market dynamics).
Examples of growth opportunities are:
- Young market: If it is a relatively new product, the market is not yet oversaturated and not yet distributed between companies. It is easier for new entrants to enter the market.
- Low competitive intensity: The second baker in the quarter has it easier than the eighth baker.
- Find out who hasn’t used the offer yet. This way, potential users can know the offer, but have not yet used it. Find out why and use this to your advantage (to increase penetration).
2. Displacement: Gaining market share
When the market is already saturated, it’s about gaining market share at the expense of your competitors. Take advantage of the weaknesses of your competitors (Competitive analysis) and try to gain market share through a better marketing strategy.
Examples of market penetration through better marketing:
- More efficient distribution channels: For example, you can be more successful through a more appropriate distribution channel by offering shorter delivery times or by being placed more directly with the customer.
- Innovative advertising: By targeting customers better and more specifically (more efficient advertising), you should be able to gain market share. It is also possible to focus specifically on a sub-area of the overall market and to address a specific target group individually.
3. Location: More successful with the right location
Sometimes it is up to the choice of the Site for the success or failure of the same business idea. A bakery directly at the train station is probably more successful than a bakery in a less frequented street.
Check what is particularly important for the success of your business idea (sales channels, customer service, location, marketing strategy, etc.) apart from the specific offer. If you can register an advantage for yourself here, success is also possible with an already known product. By the way, market penetration is the first of Ansoff’s four basically possible product market strategies.Tip
Find out market penetration: Enter all competitors on your own Google Maps map – so you can keep track and see how far the market penetration has progressed.
Market penetration in the product market matrix
Harry Igor Ansoff has developed one of the first strategy tools as an economist with the product market matrix. In the Product Market Matrix, Ansoff illustrates relatively simply the basic strategies that companies and start-ups have to develop business ideas.
One of the four core strategies of the matrix is market penetration. As described above, it is essentially a question of gaining more market share in an existing market with an existing (not new) product. This is usually done through a more efficient use of marketing tools. The advantage of this strategy is that the risks are usually manageable. For this, the growth potential is usually very limited, as the market is saturated.