Market penetration is the percentage of a tarket market that consumes a product or service. Market penetration can also be a measure of one company’s sales as a percentage of all sales for a product.

Market penetration for a good or service indicates potential for increased sales. In other words, the smaller a product’s market penetration, the more a company should invest in its strategy for marketing that item. For this reason, high market penetration indicates that a product has become established and the company is a market leader.