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3 Examples of Market Penetration

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Market penetration is the percentage of your target market that purchased your product or service in a period of time. The following are illustrative examples.

Restaurant

A vegetarian restaurant in a small town estimates that there are 12,000 vegetarians in the area. They have 1,200 unique customers in a year. They estimate their market penetration as follows:
penetration = (1,200 / 12,000) x 100 = 10%
The restaurant decides to invest in local advertising to reach more customers.

Business Services

A telecom company has identified 1,300 corporate customers as their target market. They currently have signed 883 customers. They calculate their market penetration as:
penetration = (883 / 1,300) x 100 = 67.9%
The firm decides to expand their distribution to reach a broader target market.

Fast Moving Consumer Goods

A market research firm estimates the percentage of total customers in a nation that have purchased a variety of branded consumer products each quarter. Firms use this information to evaluate their customer base and develop strategies in areas such as advertising and promotion.
Overview: Market Penetration
Type
Definition
The percentage of a target market that purchase a product, service or brand in a period of time.
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