when a company tries to implement growth strategies there are often four ways of doing so developing new markets diversifying into new products penetrating existing markets or developing new products these four strategies are often depicted in an ansoff matrix 
because the strategies that require new markets or new products are considered riskier market penetration is often the lower risk option for growth this is because the market has already been created and can be studied in addition the company may already be offering a product or a variation of the product using some of the techniques below a company may experience growth through market penetration more likely than not a company won t be able to increase market share by increasing its price however veblen goods do contradict the law of supply and demand and a company can more likely increase market penetration by increasing its prices for such goods for other goods it would need to lower prices this requires the company to sufficiently understand its input costs and profit margins it also requires an understanding of its consumer base and whether a lower price will attract the audience the company intends to have for the long term though market penetration often occurs with existing products a company may be able to solve a customer s problem in an innovative way with a new product though this riskier option does not guarantee market adoption a company may invest in research and development to study existing products analyze gaps in value detect where existing products fall short of consumer expectations and manufacture a new product with the proliferation of online sales many businesses may already have access to wider markets than they realize however for service companies that may be restricted to one geographic region the company may employ the market penetration strategy of moving developing and expanding to a new area without having to leave its original location the company may be able to fund operations in a new site by leveraging success at an existing site instead of seeking new places to operate companies may penetrate new markets by seeking new people to work with consider the barnes noble and starbucks partnership by agreeing to share in the success of internally operated cafes within bookstores starbucks was able to enter into a different market it otherwise would not have had access to in the example above it would have been critical for starbucks to consider how its brand image integrated with barnes noble without careful consideration customers may have been confused to see it within other types of stores i e consider a starbucks inside of a home depot though one strategy above entailed creating a new product sometimes companies simply need to revamp an existing good this is clearly evident with the frequent releases of updated smartwatches cellphones gaming consoles and other technological devices with each iteration a company can simply improve and offer new benefits plus existing customers who have already experienced the old devices may be further inclined to upgrade after a positive experience though partnerships entail two separate entities temporarily coming together to share in the success acquisitions result in two separate entities legally joining together by acquiring a company the acquirer may instantly have access to new products markets labor skill sets intangible assets like goodwill or research development for companies that do not want to permanently discount their prices companies can penetrate markets by offering temporary promotional opportunities this strategy lures consumers in by attracting them to low prices be advised that though this may result in short term success it is more likely to lead to the incorrect audience having been attracted especially if a company strives to be a higher quality and therefore higher price company companies may have everything they need to successfully bring a product to market however if they do not have the appropriate staff on hand their product may falter no matter how strong a manufactured product is a company must be able to bring it to the market communicate its value and close sales this may require a company to increase the headcount of sales reps or invest more heavily in stronger talent advantages and disadvantages of market penetrationfor most companies increasing their market penetration will increase sales that s because market penetration strategies often entail increasing the number of customers served or more deeply becoming engrained in the larger customers they serve companies may also experience other benefits from market penetration market penetration leads to higher visibility of products or services and markets may begin to better recognize the benefits a company may be able to offer this allows a company s brand equity to increase as public perception of a company is most often improved as the company penetrates new markets companies can also leverage successful market penetration by being more strategic with what they offer customers instead of being a price taker companies that have a deeper presence in a market are more likely to be able to set their own price and sale terms or enhance their products as they see fit in many ways market penetration can only occur through product differentiation and being able to convey unique benefits to consumers though market penetration may improve operations it also has the risk of backfiring when companies seek out new markets or offer new products they always run the risk of diminishing their existing image creating wrong public perceptions about their company or attracting a client base that does not align with their strategic plan as products become less popular companies may be forced to liquidate products by selling them at a discount if they no longer resonate with consumers in markets they penetrated though companies often perform market segmentation to attempt to attract the right customers market penetration may increase the risk of the wrong customers being served this can be detrimental to a marketing plan that strives to cater to a certain customer willing to pay certain prices for a certain quality of goods should apple accidentally attract consumers who want to pay the lowest prices in the market it will face a dilemma in trying to retain those customers or shifting its marketing plan market penetration may also sound like a single instance of garnering a deeper market presence but it is actually a company wide strategy that requires everyone to be on the same page consider how the manufacturing warehousing procurement or selling departments may not be aligned this puts undue pressure on some departments that may need to play catch up as markets are penetrated often leads to greater financial success through increased salesoften leads to greater financial success through greater quantities of customersimproves product visibility as more consumers are exposed to a company s goodsimproves a company s brand equity if the goods are appropriately received by the marketmay cause confusion about how one product relates to anothermay cause the company wide image to falter if the wrong type of consumer is attractedmay force a shift in marketing strategy if a different audience is attractedrequires all departments to be aligned otherwise undue pressure will cause certain departments to struggleexample of market penetrationas of the first quarter of 2024 apple inc aapl has a 17 market share of the smartphone market second to samsung which has a 20 market share 1apple has consistently introduced new versions of its iphone every year with added enhancements and upgrades making the phone a compelling product to buy for consumers as a result of its market penetration apple has maintained a large market share when compared to some other competitors such as xiaomi and vivo 1however the company still has opportunities to add to its customer base by targeting its competitors clients primarily samsung to woo them over to the iphone and grab further market share 