Final answer:
Market penetration is a growth strategy focused on increasing market share in current markets using existing products, exemplified by Under Armour. It involves promotional tactics like increased advertising, discounts, and improved customer loyalty programs, within a familiar market environment, thereby posing the lowest risk for growth.
Step-by-step explanation:
Market Penetration as a Growth Strategy
Market penetration is a growth strategy aimed at increasing a company's market share within existing markets using current products. This strategy involves efforts such as aggressive marketing, promotional activities, price adjustments, and an improvement in product features or customer service. A well-known example of successful market penetration is Under Armour, which has focused on capturing a larger share of the sports apparel market through continuous marketing efforts and endorsements by reputed athletes. This strategy is considered to have the lowest risk because it operates within established markets and product categories where the company's competencies are already proven.
To achieve higher market share through market penetration, companies may employ tactics such as:
- Increasing advertising to promote brand recognition.
- Offering discounts or bundling products to encourage bulk purchases.
- Improving customer loyalty programs to retain existing customers.
- Enhancing product quality or features to outshine competitors.
Overall, market penetration is about maximizing the potential within a familiar terrain before looking for growth in new products or markets.