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However, businesses have to ensure they have enough capital to stay in surplus before the price is raised up again. This article needs additional citations for verification. Upper Saddle River, New Jersey. Market penetration is a tool for understanding potential earnings of a business and is integral to calculating a resourceful business model. Market penetration is a way to determine successfulness of the business model and marketing strategy for a product.

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Sales can be declining but shows opportunity for the business, it could be the perfect time to make alterations so as to grow market share. Retrieved from " https. Market penetration occurs when a company penetrates a market in which current or similar products already exist. This strategy involves selling current products or services to the existing market in order to obtain a higher market share. Therefore, it is unnecessary to this strategy if the sales are increasing.

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However, it is exceptional if the sales growth trend shows the gross increase but is much less significant comparing to its competitors, because this could indicate the business's market share is actually shrinking, then this strategy can be a good approach to try regain its market share. It is defined as the number of people who buy a specific brand or a category of goods at least once in a given period, divided by the size of the relevant market population. Distribution can also contribute to sales volumes for businesses. Examples of penetration strategies. Questions, brainstorming and discussions can help distinguish whether it is the best time for market growth. 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. London, United Kingdom.

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Description: Retrieved from March 20, , from http. For a business to come up with a decision using the grid, key personal must consider numerous factors such as market penetration, product development, market development and diversification, it measures the brand popularity. Some factors of market penetration are holding costs, advanced inventory management practices and technology e. When implementing change companies must be careful not to compromise their existing revenue or customers. Market economics Marketing terminology. Clear and precise planning will also help minimise this risk and will lead to a successful improvement and boost in market share. This article has multiple issues. Production and Operations Management.
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