What is market penetration?

Market penetration has two related meanings: as a metric, it is the percentage of the potential market that already uses your product (or your category); as a strategy, it means growing by winning more of an existing market with existing products — usually via pricing, distribution, or taking customers from competitors.

Low penetration signals room to grow without building anything new. Penetration strategies are inherently competitive: in a mature market, nearly every new customer is a competitor’s former customer.