Apple's market share is bigger than BMW's or Mercedes's or Porsche's in the automotive market. What's wrong with being BMW or Mercedes?
Steve Jobs
If you’re looking to start or expand your business, you need to have a firm understanding of how to enter and grow within your chosen market. This requires you to take what you’ve learned during your market analysis to develop a market penetration strategy for your business. For your business is the key word. Many online articles talk about achieving market dominance, cite examples like Apple or Coca Cola. Certainly, dreaming big is often thought of an important attribute that leads to success. Dream big and plan with realism.
The fundamental 4 Ps of marketing: Product – Keep it simple. Avoid the next shiny feature trap Understand the impact of every new added capability Kill off new ideas before they kill your product. Price – often thought of as the most important of the 4Ps. At the start of your business, you will not be able to be a price leader. The market will dictate what you can charge but: If you plan to be a premium product do not undercut the market If your funds are limited – a higher price that gives a better margin in exchange for slower growth maybe right for you. But do not get too much above market. Give something in return – more attractive packaging etc. Too low a price can make people suspicious. Particularly if you are selling online – test price points. Use pricing to control demand. Promotion. Covers all the activities you use to market your product or service to your target customers Often very expensive so consider how you can track your ROI Manage you’re the cost of customer acquisition versus the lifetime value. (Margin $ not Sales $) Know where your customers go for information. This does vary by generation Do not dismiss influencers. Consider Micro or Nano influencers. Social media – Pinterest, Instagram, Tiktok Place – chose your distribution channels carefully. Make it easy for your customers to buy But ensure the channel is aligned with your objectives Multiple channels are fine – just do not get drawn too thin Online – consider your own site if niche – use a platform if more generic. SEO People – the fifth P refers to your customers and your staff Understand your customers needs, aspirations, desires. Are there gaps you can bridge Ensure your staff are motivated, well trained and focused on customer satisfaction. Does your marketing strategy reflect your values and mission? Beyond the 5Ps – create a barrier to entry. What do you do better than your competition? Identify your core competence? What can make it difficult for your competitors to match you? Company culture can be a very effective barrier to entry. Connect market penetration to your overall business strategy Keep in mind that market penetration should not be conducted in a bubble. Any strategies you develop or steps you take should connect to your broader business strategy and help you reach specific milestones. One way to keep this top of mind is to incorporate a review of your market penetration rate and any ongoing strategies into your monthly plan review.
This will encourage you to look at financial forecasts, milestones, and current tactics all at once. If you find that a current penetration strategy doesn’t support your larger goals, it may be wise to back off or reallocate resources until it becomes relevant. Or it may present an opportunity to adjust your business plan to fit the opportunity you’ve found. But without reviewing it alongside your plan and financials, you’d never know for sure.
Tags: How to start a business, achieve start up success, Ansoff matrix, business growth, market penetration, the successful entrepreneur, business common mistakes small business start-up; avoid these common mistakes of business, mistakes in business, IBGR.network, Jeremy Gray, Practical Solutions to Difficult Problems