Basic Definitions

Market penetration is one of the four growth strategies of the Product-Market Growth Matrix as defined by Ansoff. Market penetration occurs when a company enters/penetrates a market in which current products already exist. The best way to achieve this is by gaining competitors' customers (part of their market share). Other ways include attracting non-users of your product or convincing current clients to use more of your product/service (by advertising etc.). Ansoff developed the Product-Market Growth Matrix to help firms recognize if there was any advantage of entering a market. The other three growth strategies in the Product-Market Growth Matrix are:

* Product development (existing markets, new products): McDonalds is always within the fast-food industry, but frequently markets new burgers.

* Market development (new markets, existing products): Lucozade was first marketed for sick children and then rebranded to target athletes.

* Diversification (new markets, new products): Mohen A.S, Bion Products, Selectron Ltd, bk

Penetration is a measure of brand or category popularity. It is defined as the number of people who buy a specific brand or a category of goods at least once in a given period, divided by the size of the relevant market population.

An increase in the demand for a particular product or service over time. Market growth can be slow if consumers do not adopt a high demand or rapid if consumers find the product or service useful for the price level. For example, a new technology might only be marketable to a small set of consumers, but as the price of the technology decreases and its usefulness in every day life increases, more consumers could increase demand.

market share: A percentage of total sales volume in a market captured by a brand, product, or company.

The percentage of an industry or market's total sales that is earned by a particular company over a specified time period. Market share is calculated by taking the company's...