5 Signs You Need a New Market Penetration Strategy

Did you know it’s six times more expensive to get a new customer than it is to keep an existing one? That fact may be why you’ve decided to focus less on developing new markets and more on market penetration.

That doesn’t mean market penetration is always easy to pull off. In fact, some business leaders adopt strategies that just don’t work for their business.

How do you know when your market penetration strategy isn’t working? You can look out for any of these five signs. Each of them shows you may need to adjust the course to achieve your goals.

1. Your Chosen Channels Aren’t Working

Choosing the right sales channels is key to market penetration. If you want people to buy your products, you need to put them somewhere they’ll actually be able to pick them up.

An example is selling a beauty product to young women. If you place your product in a specialty store, you’ll reach some of your target audience.

What would happen if you also put the product in drugstores and online cosmetics shops? You’d likely increase both your customer base and repeat sales. These sales channels improve accessibility.

Poor placement for this product might be a bookstore or a grocery store. Your target audience is unlikely to shop here, so this placement doesn’t work.

One potential solution is to look at direct sales. Another option is to work on partnerships, affiliates, and reseller relationships. These tactics give you access to channels that may be better suited for your business.

2. Your Customers Are Unsure About Product Quality

Another reason your market penetration strategy may not be working is perceived quality. Your current customers might be unsure about product quality.

You may need to conduct some market research to get to the bottom of this particular issue. Suppose you have a medical product you’ve made available to hospitals and other offices.

People may not buy your product because they believe it’s poor quality. Improving the quality of the product will encourage them to choose your product instead.

People sometimes buy products based on appealing packages or perceived quality. You could work to improve the perception of your product as well.

3. Price Adjustments Haven’t Supported Market Penetration Strategy

Another common tactic in market penetration is adjusting the price of your product. Raising the price can increase the perceived appeal of the product.

In other cases, lowering the price will lead to widespread adoption. A lower price encourages people to try, as well as to buy more often. Discounts and sales also incentivize repeat sales.

If you’ve adjusted your price but it hasn’t improved market penetration, you may have gone the wrong way. You may have raised the price when lowering it would attract more customers.

You can also raise or lower the price too much. A company that raises the price too much may be seen as caring only about profit and gouging customers.

By contrast, if you lower the price too much, people may think your product is low quality. Market research can help you discover the “sweet spot” for pricing almost any product.

4. Your Customers Don’t Understand Product Uses

Another problem with market penetration strategies sometimes stems from customer misunderstandings.

Suppose you have a product that’s good for six months or two weeks once it’s open. Your customers don’t realize they only have two weeks to use it after they open it, though. They think it will still be good for six months, and they won’t need to buy the product again until then.

A customer may also buy small quantities or buy infrequently because they think the product has limited use. Suppose you have a medicinal cream that treats bug bites, rashes, burns, and more. If the customer thinks the product only helps with rashes, they’ll use the product less often than if they realize everything it can do.

Market research can be particularly illuminating here. It can show what your customers use the product for, as well as the uses they’re aware of.

You can learn more here about the insights market surveys can provide your business.

5. Brand Awareness Is Low

Your market penetration strategy might not be working because no one is aware of your brand. People may confuse you with one of your competitors. They may not have even heard of you.

The good news is that it’s easy to fix this part of your strategy. Penetration marketing tactics are aimed at raising awareness of your brand.

The right marketing mix can also assist with some of the other signs listed here. Good content marketing can help dispel myths about the quality of your products. A social media strategy might inform customers about everything your products can do.

Some of the marketing tactics you may want to consider include:

• Influencer marketing, which helps you reach out to would-be customers in niche groups
• Field marketing, which helps customers acclimate to a product
• Integrated marketing, which looks at your marketing and makes it work holistically

Innovative marketing can also assist in creating better brand awareness. It can also emphasize the unique features of your brand and product.

The Informed Business Is a Growing Business

These are just some of the signs your market penetration strategy may not be working the way you think it should. The good news is there are plenty of solutions out there. Any of them can help you increase penetration, market share, and sales.

Increasing penetration and growing your business means keeping an eye on market conditions. The right market research, the right data, and the right technology all play key roles in helping you achieve your business goals.

If you’re looking for the latest business tips and trends, check back often. We have plenty of great how-to articles to help you leverage technology and grow your business the smart way!