Calculates the market penetration based on the number of customers within an area compared to a demographic variable such as total population. You can also calculate market penetration based on a weight field in the customer layer rather than customer counts—for example, you can calculate penetration based on total sales per household for each ZIP Code. The layer used for calculating market penetration must be a polygon layer, such as a standard geography layer from Business Analyst or a trade area. The polygon layer requires a numeric field with market information—for example, total households. Use a trade area and specify a store ID for both the polygon layer and the customer layer to calculate the performance of your store trade areas.
Calculate Market Penetration
Calculate Market Penetration—Business Analyst Toolbox | ArcGIS Desktop
The market penetration of a product or service is one of those numbers every small business owner ought to stay on top of. Knowing the percentage of potential customers that have purchased from you lets you know how well you're doing, and how much growth potential your business has. Market penetration always involves a bit of guesswork, but by doing your homework you can come up with a pretty reliable figure. Determine the entity you're going to count as a customer. Depending on your business, this could be a type of individual, a household, a company or some other institution.
MPI - Market Penetration Index
Market penetration is a measure of how much a product or service is being used by customers compared to the total estimated market for that product or service. Market penetration can also be used in developing strategies employed to increase the market share of a particular product or service. Market penetration can be used to determine the size of the potential market. If the total market is large, new entrants to the industry might be encouraged that they can gain market share or a percentage of the total number of potential customers in the industry. The penetration numbers might indicate the potential for growth for cell phone makers.
Market penetration is a crucial indicator as to whether your marketing and sales strategies are working. Market penetration is the percentage of identified potential customers you have acquired. Not meeting the desired penetration rate could be a strategic issue in marketing or sales, or it could be that you need to take the time with market development to expand the potential consumer base. Here's how you determine your penetration rate. The penetration rate is easy to calculate if you know your target market size.