Market penetration can mean two things. The first is a measurement. It compares the volume of products sold compared to its total target market, given as a percentage. For example, if you estimate that there are 100,000 people who need your product, and you are able to sell 20,000 units, your market penetration is 20% (20,000 / 100,000 x 100).

Market penetration also refers to strategies and activities that help increase a product’s market share. These include advertising and promotional initiatives.

Both definitions are important to startups, since both penetrating markets and gaining traction are important to success.

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