Hi,
I would like to know what is the difference between penetration rate and market share?
Thank you.
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Difference between penetration rate and market share?
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Some more context would have been helpful. However, basic definition of the items can be the following. I have taken the example of COVID vaccines to make it easier to understand.
- Market Penetration: How much percentage of vaccine eligible people have actually got a vaccine. In other words - what is the ‘penetration’ of COVID vaccines in the market.
- Market Share: How much percentage people got the Pfizer vaccine, Astra-Zeneca vaccine, J&J vaccine etc. In other words - what is the market share of each vaccine.
This diagram below illustrates this concept.
(edited)
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Hi there,
Think of penetration rate as the “macro” or big picture view. Of all the people who could use the product (i.e. the TAM), it's the % of people actually using it. This represents missed (or potential) opportunity.
Market share is of that captured market (TAM times penetration rate), what % do you specifically get? All competitors' market share should add up to the current market size.
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