Incidence and Penetration Analysis are important strategic tools used to assess the presence of a product or service in the market and understand market share. In this article, we will explore what incidence and penetration analysis entail, how they are applied, and how businesses can effectively establish their presence in the market using these analyses.

1- What is Incidence Analysis?

Incidence analysis is a methodology that examines the rate of acquiring new customers within a specific market during a certain period. It measures how many new customers adopted a product or service during that period. The incidence rate is typically expressed as a percentage and is measured relative to the size of the market.

2- Why Conduct Incidence Analysis?

1. Determining Market Potential:

Incidence analysis helps determine the number of potential customers who have not yet used or purchased the service within a specific market. This allows businesses to understand the true potential of the market.

2. Discovering Market Expansion Opportunities:

Incidence analysis is used to identify market expansion opportunities. Understanding where the service or product is more widely adopted in terms of regions or demographic groups helps businesses tailor their strategies accordingly.

3. Developing Marketing Strategies:

Incidence rates can inform the development of marketing strategies. By focusing on regions or segments with high potential for acquiring new customers, businesses can manage their marketing resources more effectively.

3- What is Penetration Analysis?

Penetration analysis is a type of analysis that examines the percentage of the existing customer base for a product or service within a specific market. It measures how much the existing customers have adopted the product or service. Penetration rate is typically expressed as a percentage.

4- Why Conduct Penetration Analysis?

1. Understanding Existing Customer Behavior:

Penetration analysis is used to understand how much the existing customer base has adopted the product or service. This is important for better understanding customer behavior and devising strategies to satisfy them.

2. Competitive Analysis:

Penetration rates can be used to evaluate the success of competitor firms in the same market. High penetration rates may indicate a strong position for a business in the market.

3. Developing Remarketing Strategies:

Penetration analysis can be used to offer new products or services to the existing customer base. Remarketing strategies can be developed to better meet the needs of customers.

5- Steps to Implement Incidence and Penetration Analysis:

1. Data Collection:

Data must be collected for incidence and penetration analysis. Sales figures, customer numbers, and market size are fundamental to these analyses.

2. Calculation of Rates:

To calculate the incidence rate, divide the number of new customers by the total number of customers and express it as a percentage. The penetration rate is calculated by dividing the number of existing customers by the total potential customer base.

3. Analysis and Decision Making:

The obtained rates are analyzed. A high incidence rate may necessitate the development of new marketing strategies, while a low penetration rate may require strengthening existing customer relationships.

4. Strategy Implementation:

Based on the analysis results, strategies are developed and implemented. Businesses can optimize their market presence strategies based on the results of incidence and penetration analysis.

6- Conclusion:

Incidence and penetration analysis are powerful tools for businesses to understand their impact in the market, develop expansion strategies, and gain a competitive advantage. These analyses can help businesses make data-driven decisions to establish a more effective presence in the market.