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Anonymous A

on Aug 21, 2021

Global

Difference between penetration rate and market share?

Hi,

I would like to know what is the difference between penetration rate and market share?

Thank you.

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Agrim

Coach

edited on Aug 21, 2021

BCG Dubai Project Leader | Elite Prep to dominate interviews | 10 years in Consulting + M&A | Free prep plan

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.

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Ian

Coach

on Aug 21, 2021

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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