Market penetration: the art of “stealing” customers from your competitors

Market penetration is a strategy used by companies to expand market share, or in other words, to “steal” customers from their direct competitors by offering them additional advantages or aggressive pricing.

Therefore, if your goal is to increase visibility and sell more, this may be an appropriate strategy for your business.

In this publication, we analyze this type of strategy, tell you about its advantages and disadvantages, and give you tips on how to plan a good market penetration strategy.

What is market penetration?

As we have already mentioned, market penetration is a technique used by some companies to gain market share, that is, to increase market share.

To achieve this, it is usually necessary to apply a set of commercial strategies to reach potential users in a more effective and direct way.

The goal is to sell more with the products or services they already have.

Carrying out market penetration strategies involves considerable risk. Therefore, if you are considering doing so, it is necessary to first carry out a thorough study of the market, your costs, the time you can maintain the proposed price, etc.

As a guideline, here is a list of some of the actions you can take to implement this type of strategy:

  • Calculate the penetration rate** using Big Data. The market penetration rate is the proportion of customers who choose your brand or product out of the total sales made in your industry. This rate reflects the ratio of the number of customers you currently have to the number of potential customers.
  • Develop a content marketing strategy to gain audience and visibility.
  • Make an aggressive offer that pushes the user to abandon your competition to become your new customer.
  • Implement engagement strategies to increase the number of consumers who buy your product or service.
  • Use audience segmentation techniques, the practice that allows you to identify your potential customers.
  • Explore new distribution channels to expand your brand’s presence.

So when is it appropriate to go for market penetration? When you are aware that your company has not exploited the full potential of its products or taken advantage of the opportunities offered by current market conditions.

And you are also convinced that you are capable of gaining the loyalty of those new customers that are about to arrive, thanks to the quality or advantages of your products compared to those of your competitors.

Advantages of using market penetration strategies

Market penetration offers multiple benefits. Here are the most important ones:

Achieve broadening participation.

Undoubtedly, this is one of the main objectives: to gain market share. That is, to reach those potential customers who have not yet given you a chance because they do not know you or because they are loyal to another brand.

Achieving a greater share of participation is not easy; you need a good strategy to make it possible.

For example, betting on greater brand exposure, negotiating with distributors to highlight your products, making good offers, etc.

These strategies to achieve market penetration are often used by companies that want rapid expansion and exponential growth.

Increase your sales

The increase of customers, as it is logical, directly aims to increase sales.

However, we must not confuse this increase in sales with profits. If the offer is extremely aggressive, you may even make a loss. That is why it is so important to calculate costs well and propose strategic objectives that are well defined over time.

If you have opted to adjust prices as much as possible, prepare the strategy you are going to follow later to return to profitable prices without disappointing these new customers.

Make your brand known

The use of market penetration strategies can help a company to be present in the minds of consumers and improve their perception of the brand and, therefore, improve its results.

In this case, branding is essential to convey the right image and message and reflect the new opportunities that open up with your entry onto the scene.

The message must have an aligned voice and a consistent brand aesthetic across all platforms and channels to make it easy for potential customers to recognize. Always keep their needs, aspirations and expectations in mind when addressing them.

Disadvantages of using market penetration strategies

Market penetration presents some challenges. For example, aggressive competition can lead to a very dangerous price war.

It can also lead to decreased profitability, increased costs, etc.

Therefore, it is important to consider all these aspects before implementing a market penetration strategy.

Tips for a good market penetration strategy

First of all, you must analyze all the pros and cons. Assess the risks and benefits.

Once this part is clear and well defined, you must define the market penetration strategy to follow.

Here are 2 pieces of advice that we consider essential:

Learn from the big players.

Before you, surely other companies have already bet on increasing their market share and have succeeded.

The question is: what strategy did they follow to achieve it?

And another equally or more important question: what are the companies that currently have the highest market share doing?

Benchmarking serves to identify their strengths and weaknesses, as well as the opportunities to establish market penetration prices that will increase your expansion. It also identifies the challenges you will face.

These leading companies will give you a guide to set strategic objectives.

Focus on your buyer persona

You will never be able to reach your potential customers effectively if you don’t know exactly what they want and what they expect:

Is it a question of money, or do they really want quality service or a quality product, what do they value, what would make them leave the competition and go with you?

You need to consider all of these issues if you want to develop an effective market penetration strategy that will drive your company’s growth.

Examples of market penetration

Market penetration strategies are very varied and depend on multiple factors such as the objectives to be achieved, the company’s current position, its budget, etc.

To make it easier for you to understand, here are some examples of the main penetration strategies used by companies:

Telecommunications companies

This is perhaps one of the most graphic examples.

You are probably familiar with the wars between companies such as Movistar, Vodafone, Orange….

They are constantly fighting to steal each other’s customers.


By offering promotions, adding additional services such as Netflix, HBO, sports packages, movie packages, etc.

And it’s not just the big players that are competing. Low-cost telecommunications companies are also pushing hard to win over that sector of the audience that values a good price more than an endless list of extras they don’t need.

Low-cost companies

Another clear example is the low-cost companies that are aggressively entering the market. We can find cases in almost any sector, from airlines like Ryanair to smartphone manufacturers like Oppo.

They break the market by offering a decent service or quality in exchange for a much lower price than the competition.

They use that lure to override potential customers’ objections and quickly gain market share.

Mythical rivalries

Apple vs Samsung, Coca Cola vs Pepsi, McDonald’s vs Burger King?

The list could be very long, but in the end it boils down to the same thing: large companies that have been fighting for years to gain market share at the expense of taking it away from the other.

All of them are established companies with very loyal customers who want nothing to do with the competition. But then there are the “undecided” and the new potential customers that are constantly emerging.

They focus their efforts on maintaining their current share and gaining as many followers as possible, investing heavily in branding and advertising.

Knowing your competition is essential to any pricing strategy.

Market penetration is an important strategy to consider when you want to increase your market share. While it offers many benefits, as we have seen, it also has some challenges.

In any case, whatever strategy you follow, knowing your competition and tracking them allows you to increase your sales and identify opportunities.

At Boardfy, we help brands do just that. Boardfy allows you to continuously track your competitors and/or distributors, thanks to the world’s fastest price monitoring tool.

Access updated information at all times to know who is selling your products and at what price.

At Boardfy we have a Customer Success team ready to accompany and guide you to meet your brand’s objectives.

How can we help you?

  • Price monitoring: keep track of your distributors’ prices on their websites, Google Shopping, Amazon, Ebay, or any other marketplace or comparator.
  • PVR variations: activate alerts to quickly detect if any distributor or seller is not respecting your PVR.
  • First-Mover technology: identify where price variation trends originate to better understand the market and your online sales channel.

Want to talk to us or try it yourself?

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