Here are some advantages of practicing market penetration strategies
- Swift Growth
If the aim of your business and marketing activities is to expand your customer base, then market penetration is the exact remedy you need. When you propose lower prices than your rivals, tempting their customers becomes possible and you receive what you expected. Thus, fast growth is heavily dependent upon lower prices. The more rational these are the better will be your chances.
- Cost-effectiveness
Certainly, it’s reasonable to say that penetration leads to cost-efficiency. It can lead to cost advantages if your business processes go in the manner as you anticipated. By keeping low prices, you ensure that customers stay with you and it also means that you can order more quantity of products from your suppliers that eventually results in higher profit figures. This is why certain companies take the risky route and first buy products in bulk due to discounted prices and then they implement penetration strategy.
- Contest Competitors
One of the more challenging segments of the market penetration strategy is to combat with your rivals. Just try to imagine, you have plentiful competitors who are desperately trying to evolve and slow you down and are stealing your customers which results in lowered profits for you. Now following the rule of survival, your only way out is to fight and defeat them to stay at the top. For example, low initial prices will force your competitors to move to alternative strategies with changed market penetration pricing regulations. By this way, you will appeal to the lost consumers and it will render competitors on the defensive or leaving the market altogether.