Market Penetration, Growing Your Business
There are several ways you can penetrate the market. The goal of penetrating the market is to create greater awareness around the products and services you offer, thus increasing your market share. You accomplish this by taking customers from your competitors. The question becomes how to steal customers.
You can create an influx of customers by offering a better service and/or product at a lower price. When you set your price, there are several things you need to consider.
What is the cost to produce the product or service?
Will lowering your price negatively affect your budget? In other words, will you be able to generate sufficient revenue to create the profit you want?
By lowering your price, you can sometimes communicate with the public that your product or service is not as high of a quality as your competitor. Your price must reflect the worth you feel your product and/or service offers.
Is it possible to simply improve or increase the overall value and quality of your product and/or service without lowering your price?
Can you increase your marketing efforts to attract more clients?
Is there a way to implement a rewards program for referrals? Create a marketing stream your clients complete for you.
Or, you can buy out the other competitors in the market. Expanding your business through buyouts can be a very effective way to increase your market share. There are several things to consider when making this decision.
If the business you purchased had a great reputation for high quality products and services, you purchase this reputation. But if they have a negative reputation, you purchase that reputation.
You must weigh the pros and cons of investing or purchasing a second business. Can you handle the increase in overhead?
For a few months, the expenses will outweigh the revenue, can you financially afford that?
Do you have the staff to assist you with the purchase and expansion?
There is no one size fits all solution to expanding your market share. Ultimately the best strategy will come down to what is the best fit for your business and for you. Remember to always make a decision that supports your leadership style and the lifestyle you want. Just because a decision is right for the business does not make it right for you.