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Penetration strategy in retail refers to a market approach where a company aims to gain a significant share of the market by setting lower prices or offering competitive advantages.

This approach is designed to attract a larger customer base and increase sales volume.

The goal is to secure a strong foothold in the market and potentially deter competitors. This strategy often involves sacrificing immediate profit margins to achieve long-term growth and customer loyalty. It can lead to increased brand recognition, customer engagement, and market dominance. However, it requires careful planning to ensure sustainable profitability once the initial penetration phase is successful.