When a market has a traditional distribution structure, mass distribution and market penetration are not necessary, because demand exceeds supply and the customer seeks the supply from a limited number of middlemen.
Market penetration is used by businesses to determine their goods' market share in addition to being utilized on a worldwide and industry-wide scale to quantify the reach of products and services.
The amount of potential consumers who have chosen to buy a certain company's product over one from a rival, or no product at all, is known as market penetration. When a company's market penetration is represented as a percentage, it means that the company's product accounts for a specific proportion of the overall market for those items.
Market penetration is determined by dividing the current sales volume of the good or service by the total sales volume of all comparable goods, including those offered by rival companies.
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