Penetrated Market Details

A market may be a geographical region, an age group, a gender, or an interest group. A penetrated market is one in which a product or service is available and has sales in that market. A successfully penetrated market is one in which the sales volume of a product or service is high in that market. A low volume of sales in a market indicates that this market has not been successfully penetrated and may indicate that the seller needs to reconsider its marketing strategy or change the product.

The extent to which a market has been penetrated can be expressed as a percentage of sales of a given product compared to the size of the total potential market. If a company has a high percentage of sales in a total market, it needs to concentrate on maintaining customer loyalty and monitoring its rivals' sales and strategies.

A market that has been highly penetrated may not contain much potential, new customers as most people are already using the product. In this case, growth may only be possible if they can persuade customers to use the product more frequently and purchase it more often or in greater quantity.

Penetrated Market Example

Ten years ago, Bailot Books launched a new line of textbooks aimed at young people studying English as a second language. The books were aimed at different language proficiency levels, and the same books were to be used in every country. This implied that the books had to be designed with different cultures in mind. Bailot Books carefully edited the books to ensure that they didn't contain any material which might offend cultural sensibilities. A range of online materials supported the textbooks. Bailot Books sold them to bookshops, schools, and individuals, and sales were high.

However, Ruritania was an exception. The books' potential market in Ruritania was five million, but Bailot Books had sold only fifty thousand copies, despite spending a considerable sum on promotion. Bailot Books had penetrated the market, but its sales volume was only one percent of the total potential market. Compared with other countries, this was a low percentage as sales in other countries averaged around eighteen percent.

Clearly, there was something different about Ruritania. Bailot Books invested heavily in market research which revealed that students and teachers liked the content, young people in Ruritania shared the interests of young people everywhere. The textbooks reflected these interests. In the end, Bailot Books discovered that the bright colors used on the covers of the books exactly mirrored the colors of the national flag of Mayustalia, the hated colonial power which had only recently granted Ruritania independence.

Significance of a Penetrated Market

To successfully penetrate a market means that the product or service on offer has met a demand in that market. The seller must consider numerous factors including price, availability, competition, and local conditions to successfully maintain or expand the product's penetration. When a product or service fails to penetrate a market, the seller must discover what lies behind the failure and act quickly to correct any mistakes.