Brand Penetration

Posted in Marketing and Strategy Terms, Total Reads: 666
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Definition: Brand Penetration

Brand Penetration is a measure of the popularity of the brand. It is defined as the number of people who buy a particular brand over a specific period of time divided by the size of the concerned market’s population. It is calculated as a percentage. It is given by the following formula:

 

Brand Penetration (%) = Customers Who Have Purchased the Brand /Total Population

Example: Out of 1000 students if 300 buy a particular watch A. Then it’s Brand Penetration is :

 

= 300 / 1000

= 0.3

= 30%

 

There are two important metrics which are: Penetration Rate & Penetration Share. Penetration rate is similar to Brand Penetration but Penetration Share is different. Penetration Share is determined by comparing that brand’s customer population to the number of customers for it’s category in the concerned market.

 

Example: In the above example if there are 2000 students buy a watch of any brand then the

 

Penetration Share (%) = Brand Penetration (%) / Market Penetration (%)

= 300 / 2000

= 0.15

=15%

 

Thus Brand Penetration is very vital as it helps us to fight for that most important thing in the retail space – The Shelf Space. Brand Penetration gives us a clear picture of how our brand is performing as compared to other brands in the market. Thus it is very important to know the strong & weak points of your own brand.

According to the recent research by Bain & Company the Biggest Contributor to Brand Growth is increasing the household penetration. It said that Brands primarily stand out due to more people buying them. Loyalty is a factor but it does not vary much across brands & countries what varies is Household penetration which is a very important metric which is nothing but your Brand Penetration.

Building efficient Memory Structures & developing In store Assets can be two key initiatives to build brand penetration. By Memory structures here it is meant that the Brand needs to be engraved in the minds of the consumer & in store assets means fighting for the shelf space & also at point of sales. These are the two key strategies that will build trust & will help in making your brand the Super Brand.


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