7 Actionable Market Penetration Strategies for Startups
If anything is challenging in the business realm, it is none other than growing a startup. Every entrepreneur will assert how thrilling it is to have a personal business idea and see it come to life. For once, you forget about the struggle for resources and focus on opportunities and how to scale up.
However, with time, there comes a need to sustain your business, grow and expand into new markets. This is usually a tough phase for many entrepreneurs and the fact is many businesses don’t survive this period. To affirm this, the latest business failure statistics indicate that only 25% of small businesses manage to operate beyond 15 years.
Many of them are ousted in the first ten years and close to 19% fail within the first year. Why do some small businesses fail woefully and what can business owners do to prevent that? Apart from ensuring proper utilization of resources and competitor analysis, modern businesses can consider a “market penetration strategy” to survive in the marketplace.
This blog explores what market penetration is and the different strategies entrepreneurs can consider to conquer markets. Let’s begin!
What is Market Penetration?
It refers to the extent to which a product or a service provider is preferred over others in a specific market. Market penetration also refers to a product’s or service’s market share. A high market penetration rate means that a product is largely known by customers and has a good public image.
On the other hand, a low market penetration rate points to poor visibility of a product. There are many causes of a low or poor market penetration rate and these can affect business revenue, customer base, and survival chances.
There are a few brands to look at when anyone wants to understand an enviable market penetration reality. Globally, brands like McDonald’s, KFC, Samsung, Apple, Coca-Cola, Nike, and Adidas among others have a good market penetration rate. However, you can look within your area or nation to identify those brands that surpass others in terms of popularity.
A high penetration can ensure product survival in the market, enhanced brand awareness, and business growth. But all these must be planned during the first stages of a startup. Depending on what you offer, you must understand how you will make your product or service popular and favored over competitors’.
It should also be noted that market penetration strategies revolve around many factors. From opportunity identification, and strategic pricing to customer service delivery, all these influence market penetration effectiveness. But here are the most actionable market penetration strategies startups can leverage to conquer local markets and scale incredibly over time.
Market penetration refers to the extent to which a product or a service provider is preferred over others in a specific market.
Actionable Market Penetration Strategies for Startups
Price a big determinant of market penetration in the modern era. Customers will indeed choose your products at any cost as long as it offers value, but any startup must be strategic when it comes to pricing. Analyze the market leaders and the pricing methods they use. What is the price range and is that suitable for your products?
Can the price you set in that range help you cover the variable costs and produce a desirable profit margin? Also, is the price for a new product on the market, or already existing ones?
Try to set prices that are comfortable for your customers and then raise them after you are firmly rooted in the market. Also, there should be a reason for customers to buy from you and that can be quality or service delivery.
If you’re offering already existing products, consider product development and diversification. Product development refers to the strategies leveraged to improve the quality and value of a product. It can be improving its quality, choosing a better product design, packaging, and delivery.
On the other hand, product diversification refers to the process of expanding a product’s scope. For example, designing for different age groups, adding new products to the existing product line, or entering new market segments. Additionally, analyze your distribution strategies. Also, to effectively conquer a market you must spread out to more areas.
Product modification refers to the process of modifying a product to upgrade its appearance and worth in the eyes of customers. With the fact that you’re a consumer too, you must have noticed how product upgrades work wonders for businesses. The mere fact of changing a product’s appearance in terms of color, shape, size, and packaging can surely persuade customers to buy your products.
When it comes to services, upgrade them to meet customer expectations. Modern customers expect their brands to understand their needs and wants. When you tailor your solutions to customer needs, you surely create an excellent hallway to penetrate a market.
Precisely, evaluate your product features and customer satisfaction. Survey customers to understand how they feel while using your products and the challenges they encounter. Then consider introducing an upgraded product to them.
If you’ve existed for a while in the market, you can identify the need for a new product and package it to stand out.
Customers are the blood of any business. The more customers you have the more likely to expand to new markets and fetch higher ROI. However, that can’t happen with a mere desire. CRM (customer relationship management) refers to the set of practices and technologies a business uses to collect customer information, analyze it, and leverage it during decision-making.
Customer relationship management involves processes of managing customer relationships and their interactions with the business. For example, if you offer a solution like an SEO tool, you must have a streamlined approach to collecting information from the A point to the Z point of a customer journey.
There must be a tool that centralizes website data. In this way, it will show you the number of people who visited your website, the information they provided in the web form, and whether they converted. This makes it easy for you to manage customer interactions and enhance lead generation.
On the other hand, you must know what customers say about your products. If you sell products, consider obtaining feedback. This will help you improve your products and meet customer expectations seamlessly. Customer relationship management highly relies on tools as they facilitate timely data collection and decision-making, and minimizes data wastage. This will help you improve customer retention.
Partnerships are important in the marketing field and in fact, no brand can grow without influencers or partners. As a startup, you can consider investing in influencer marketing. It generally refers to the process of collaborating with popular individuals or organizations with a good reputation for product promotion.
Influencer marketing has gained immense traction in the modern era because customer decisions are influenced by several factors. When influencers and celebrities endorse products, it offers a perception to the customers that a product is worth trying. In this way, there will be more customers opting for a particular product or service.
On the other hand, partnerships where a brand joins hands with other businesses to spearhead a cause increase brand awareness. This is an obvious pathway to market penetration. As a startup, your collaborations with influencers or celebrities don’t need to be expensive. Moreover, it can happen on mutual grounds.
You can partner with an influencer on a small budget or simply request one to endorse your products online. This will help you tap into a bigger audience to attract more customers.
It is one of the oldest marketing approaches but still works wonders for marketers. Email marketing can help any small business attract leads and nurture them into buying customers. However, for email marketing to produce desirable results, it must be strategically done.
Many emails end up in spam folders and this can affect your reach to would-be leads and customers. If you consider adding email marketing to your market penetration strategies then think about the following;
Personalization – Personalization in marketing has been shown to enhance sales and revenue for businesses. In fact, 71% of shoppers expect a degree of personalized marketing for them to make a purchase, according to McKinsey & Company. Try to update and segment your email list. You can leverage AI tools to attain incredible insights about your customers or website visitors.
You can then use these insights to hyper-personalize emails and understand when the customers are more likely to read them and revert. Also, consider automated emails. These ensure timely communication with your customers at any time and stage of their customer life cycle. Set marketing KPIs and track them to understand your email marketing efficacy and website performance.
This will help you nurture leads and inspire loyal customer relationships which can directly improve marketing penetration.
Social Media Marketing
More than half of the world’s population is on social media and this is a great place for startups to be. Social media marketing precisely refers to the use of social sites to promote goods, services, and brands. Social platforms such as Facebook, Instagram, Pinterest, Twitter, YouTube, and TikTok are incredible avenues for marketers and small business owners to enhance brand awareness, improve customer relationships, and build an inspiring brand image.
Startups can leverage social media in many ways. You can create business social media profiles that perfectly represent your business or brand. You can also follow these copywriting tips to create amazing posts or website content. You can also use your social platforms to share user-generated content (UGC) to increase brand popularity and market penetration.
Additionally, you can also conduct live streams to tell your audience about your brand and why they should choose you. Precisely, startup managers can use social media platforms to cultivate relationships with their target audiences and for any other purpose.
Conduct a Promotional Program
Whether you have an eCommerce website or a social media platform, you can leverage it to run a contest. These are excellent promotional tools to connect you to your audience and possible leads. Consider setting goals for your promotional program. If you require more leads or customers, you can run a contest or a giveaway in which your audience participates to win free products or share their opinions about your brand.
Additionally, seek customers’ and prospects’ opinions about your products or services. Surveys are also a reliable way of attaining primary data that can be leveraged in decision-making. On the other hand, you can also consider social media ads to enhance market penetration strategies.
It is never easy for startups to penetrate any market. However, with tailored marketing strategies and consistency, startups can penetrate any market and emerge as market leaders in the long run. As a startup, consider laying a firm foundation for effective market penetration strategies.
That can be through providing quality products, ensuring communication with customers, and providing seamless customer journeys. This will help you penetrate the market and remain relevant in the eyes of customers.