Market penetration refers to the extent to which a product or service is adopted by customers within a specific market, relative to the total addressable market. It can also describe a strategy focused on increasing sales of existing products to an existing customer base.

As a metric, market penetration helps businesses understand their current position in the market and identify growth opportunities.

As a strategy, market penetration typically involves:

• Offering competitive pricing or discounts
• Increasing marketing and sales efforts
• Enhancing product accessibility or distribution
• Targeting competitors' customers

Formula (as a metric):

Market penetration (%) = (Current customers ÷ Total addressable market) × 100

Example:

If there are 100,000 potential users in your target market and your product has 10,000 active customers, your market penetration is 10%.