Market penetration is explained as an attempt to increase a firm's sales without diverging from its original product and market strategy. The firm attempts to improve its performance by finding a new set of customers for its current products (Ansoff, 1957).
Before penetrating into a new market, a company has to do extensive research to obtain various information about the market in question in order to fully understand how to perform its operations in that market. The following is some of the information that DA Company will have to obtain about both UK and France before penetrating into the European market.
Internal Analysis.
A large part of the decision on entering a new market is influenced by an assessment of the company's internal capabilities. SWOT analysis is one of the most common approaches in internal analysis to determine the strengths, weaknesses, threats and opportunities of the company. The most useful tools in assessing the strengths and weaknesses of a company are the company's resources, capabilities, and core competencies (Jackson, Joshi, and Erhardt,2003).
Internal analysis is the most important step for DA because it is when the company has to determine how much of their resources they can leverage, their innovative abilities to produce and deliver goods according to the needs of the new market and also whether or not they have sales and distribution channels as well as the necessary infrastructures in place (Stark and Stewart, 2013).
Defining the Market.
Before identifying your target market, it is important to first understand their needs. Here DA has to look at the attractiveness of the location of their manufacturing plant, the demographics and lifestyle, and other factors that would influence the consumers' need for their products in both the UK and France (Stark and Stewart, 2013).
How to effectively learn about the customers in each market.
Demographic Information.