One strategy that is often used by companies that are still in a growing stage is that of penetrating a market that already exists. Market penetration poses a reduced amount of risks, in part because it makes use of established products as opposed to new ones. The most effective way to enter any particular market is to allure the competition’s customers. Other possible marketing plans include attracting people who do not use your product, or convincing customers who do use it to use more of it, more frequently. Advertising is essential for successful market penetration.

A well known market penetration strategy is increasing sales. This marketing plan can be achieved by enhancing the sales force, strengthening product distribution and promotion, and spending more in marketing and advertising. However, before a company goes ahead with this marketing plan, it should be determined whether the current market is not saturated, the competitors’ market share is decreasing while the growth rate of the industry is increasing, current buyers have the means of purchasing the same products and services in larger quantities, and if economies of scale are providing a competitive edge. If some or all of those conditions are not present, this strategy is not guaranteed to succeed.

Overseas Penetration

Another feasibility is penetrating an international market, in which case there are three subjects to be faced, namely marketing (which countries and segments to enter and how to enter them, directly or with intermediaries), sourcing (obtain, manufacture or buy products) and investment and control (joint venture, global partner or acquisition). In order to make the right decisions an extensive research of the market that is intended to be entered must be carried out.

Once this study is done, there are three main marketing strategies for overseas market penetration, which are either by direct or indirect export, or by production in a foreign country. Exporting offers the advantages of being less risky, since manufacturing is home based, it provides the chance of getting acquainted with overseas markets, and reduces the risks of overseas operations. Foreign production, on the other hand, can be broken down into licensing, joint ventures, ownership, and others.

In licensing, a company from one country allows another company in another country to use its name as well as provide it with other assorted knowledge and skills. A joint venture is an enterprise in which tow or more investors share ownership.  And there is also the possibility of full ownership, that is, creating or buying a whole company in another country. All of these marketing strategies entail many pros and cons that need to be analyzed on paper before any penetrating action is taken.

Market Pricing

Going back to local market penetration, another quick strategy is market pricing, which consists of lowering prices in hopes to gain a high sales volume, which in turn would lower costs. This marketing plan is mostly used in price sensitive markets by companies attempting to increase their market share. An existing company facing a new competitor that is using market pricing should reassess their capabilities and establish whether they can lower costs, increase volume and ask themselves if they want to sell their product at a low price.

This is a general overview on market penetration, feel free to browse through or website and find out more about penetrating the market, marketing strategies and other related subjects and concepts.