Penetrating new markets is the best way to ensure your businesses’ longevity and viability. By creating new customers you are in effect creating new life for your business, life you can use to sustain your work long-term. It is not without risk, market penetration can be fraught with difficulty, but like creating itself it is worth it.
There are a number of different methods one can use to penetrate new markets and as almost every business needs to expand to survive most methods are applicable to any business or industry. Different territories have their own ideo-syncrisities of course, which means that each method will sometimes require alteration, but overall their core intent remains intact. This is why learning how to penetrate the market is so valuable.
We researched the most reliable market penetration techniques you can use at your business and collated there five methods. From penetration pricing to product launches, all will serve you well when you enter a new market. What is more, anyone can use them, from franchise operators to tradesmen and CEOs.
1 – Penetration pricing
Using penetration pricing is a tried and tested technique that many companies use when entering new markets. This is where you lower the price of your company’s products while penetrating the market to make you more competitive than your competitors. The method works particularly well in markets characterised by price sensitivity, allowing you to generate high profit margins via a high sales volume.
This doesn’t mean that you need to make your lower price your new standard going forward, on the contrary you should only use penetration pricing on a temporary basis. You can also set different prices for different territories based on their socio-economic profile and market development level. You can use this method with aplomb in lower income countries but be careful in developed nations as a lower price can imply lower quality too.
2 – Target segments
As you look to penetrate new markets you must also consider how you can define new audiences for your product. This is especially true if your product appeals to a niche market segment. Broadening its appeal won’t help it to penetrate the market that you want to enter, you need to maintain its niche character.
Creating target segments, where you divide the projected market for your products according to similarities between the market’s subgroups, will enable you to do this. This requires close cooperation with both your marketing and analytics teams, and requires a large amount of data and detailed questions for potential audience members. Researching target segments will also enable you to discover new potential markets you can penetrate going forward beyond your original penetration.
3 – Expand into new and different territories
Expanding into new territories is a tried and test method you can use to ensure optimum market penetration. Many companies find that the markets they operate in eventually become saturated with similar or analogous products. You can continue to operate in this market but in order to ensure your long term competitiveness it is a good area to leave and look for pastures green and new.
The key to expanding into new and different territories and markets is committing to a sustainable business development plan. Expansion of this nature cannot be planned on a short term basis as this expansion can only succeed thanks to a combined effort involving every department at your company. Make sure you invest highly in the data capturing abilities of your team, and also make sure your expansion plans take cultural sensitivities and proclivities into account too.
4 – Consider using a franchise model
Penetrating a new market can wreak havoc on your deal pipeline management at the best of times so you might want to consider simplifying the process as much as possible. You can achieve this by adopting a franchise business model when entering a new market. This doesn’t require you to operate as a franchise in your original model, in fact your original structure and location can remain in place.
Using the franchise model not only simplifies the market penetration process it also spreads potential risk and allows the company to adapt quicker to local needs. You won’t be as liable for loss if you would be if your directly owned company enters the new market and fails. Franchises can also localise quicker as the vast majority of the company’s staff will be more familiar with the new market than you are.
5 – Product launches
Product launches are a great way to announce your product’s arrival in a new market and generate consumer buzz around the product itself. This method relies on a solid marketing campaign proceeding it, preferably with high social media penetration combined with data driven insight into your target audiences. As such, this technique will particularly work well with products that can generate significant brand loyalty amongst younger groups.
Your product launches can take various forms but by making them engaging, participation friendly and free you’ll be able to generate significant hubbub amongst younger people. A product launch is also one of the best ways to kick off market penetration as it can generate free advertising via the news and media. Just make sure you reach out to local and niche specific publications, especially if you work in technology, and plan your media outreach well in advance.
How do you wield these different methods together?
Penetrating a new market is an incredibly exciting time for any business or salesperson but it is also fraught with potential peril. Examples abound of major international companies and corporations that tried to penetrate new markets and ended up failing, sometimes even despite their attempts to adapt their business practices. Therefore, if you are considering penetrating the market of your choosing you need to minimize as much risk as is humanly possible.
Revenue Grid’s portfolio of three sales industry tools will assist you in making a complete success of your market penetration and insure you from most reasonable risk. Revenue Guide, the company’s guided selling tool, will help you identify your key target segments and discover particularly nice markets particularly suitable for your expansion. You will also find that Revenue Inbox will help you collate and process the large amounts of data you require to make a success of penetration, while also helping you to plan pricing and product launches.
Finally, Revenue Engage allows you to take your sales sequences under control and nurture your representatives to better serve customers in localised markets. This will maximise the impact of your product as it penetrates the new market and will also help you mastermind your overarching penetration campaign. Utilizing all three products together will ensure the success of any business venture, so make sure you invest your time and resources wisely by investing in a Revenue Grid tool.