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Example of market penetration

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Students preparing for AQA BUSS1 need to be ready to calculate and interpret data that relates to the size and growth of a market and to the market shares achieved by competitors in the market. The BUSS1 exam may include information which enables these calculations to be performed - indeed the questions may require students to undertake such calculations. Students might also be required to use market-related data to calculate a firm's revenues as part of a profit or breakeven calculation. I have summarised below the formulae that you need to know and provided some examples of how to use them. Jim co-founded tutor2u alongside his twin brother Geoff!
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Market penetration

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Market penetration - Wikipedia

Penetration Pricing refers to a pricing policy generally used by a new entrant in the market, in which the price of the product is set at disruptively lower levels in order to gain the market share and therefore penetrate the market by attracting customers from its competitors. A Telecommunication company, which is new in the market, comes up with an offer to provide one-month free internet services to its subscribers. This is an example of penetration pricing since, the telecommunication company, in order to enter the market, has offered to provide its internet services for free for an initial period of one month. Here, the price of a product and quantity expected to be sold are represented on the vertical and the horizontal axis respectively. The price is kept at a relatively higher side and as a result, less quantity of goods is expected to be sold. If the price is further reduced to P2, even more quantity i. Q2 could have been sold.
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Tesla: Market Penetration

Dublin, Jan. The factors such as increasing car ownership, rising disposable income, accelerating penetration of online advertising, expanding urbanization and escalating demand for affordable used cars would drive the growth of the market. However, the market growth would be challenged by mounting concerns regarding vehicle emissions, fluctuating prices of used cars and lack of trust. A few notable trends include proliferating sales through online platforms, mounting penetration of internet and reduced rates of car insurance premiums. China used car market has been segmented on the basis of type, vehicle age and price.
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Market penetration is one of the four alternative growth strategies in the Ansoff Matrix. A market penetration strategy involves focusing on selling your existing products or services into your existing markets to gain a higher market share. This is the first strategy most organizations will consider because it carries the lowest amount of risk. This strategy involves selling more to current customers and to new customers who can be thought of as being in the same marketplace.
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