[2] Market penetration is the key for a business growth strategy stemming from the Ansoff Matrix (Richardson, M., & Evans, C. (2007).
The grid/matrix is utilized across businesses to help evaluate and determine the next stages the company must take in order to grow and the risks associated with the chosen strategy.
This could be implemented using methods such as competitive pricing, increasing marketing communications, or utilizing reward systems such as loyalty points/discounts.
New strategies involve utilizing pathways and finding new ways to improve profits and increase sales and productivity in order to stay competitive.
It helps establish the business's current station and which direction it needs to expand in to achieve market growth.
Sales can be declining but show opportunity for the business, which could be the perfect time to make alterations so as to grow market share.
If the packaging or visual aspects of a company are altered drastically, existing customers may not recognise a brand and opt for a competitor's product or service.
Too much alteration can make consumers wary, so change must be implemented in a subtle manner so as to only increase market share and build on profits.
[citation needed] Other ways include attracting non-users of a product or convincing current clients to use more of a product/service (by advertising, etc.).
[4] Ansoff developed the Product-Market Growth Matrix to help firms recognize if there is any advantage to entering a market.
To check the success, one must have a way to gauge the amount of the targeted market and how many potential localized or otherwise customers there are that would be susceptible to a product.
Emerging markets are susceptible to large companies and are sought after by globalized businesses due to the increase in disposable income the average person will have and weak local competitors.
The weakness of local competitors is due to their poor customer service and limit in resources as they don't have the capital and reach that large corporations have.
The four big emerging markets are Brazil, Russia, India and China as they were the fastest to recover after the 2008/2009 economic crisis.
Hence, the business can decide on either it is a good to enter their target market or not, and how it can make its products or services more attractive to consumers than its competitors.
The company begins to raise the price of the product once it has achieved a large customer base and market share.
A promotion is a strategy often linked with pricing, used to raise awareness of the brand and generate profit to maximise their market share.
[16] If a company is confident about their products, believes in their strengths, and is enticing to new consumers, then market development is a suitable strategy for the business.
Market penetration can be defined as the proportion of people in the target who bought (at least once in the period) a specific brand or a category of goods.