Distribution vs penetration thresholds
High distribution (i.e. the share of all relevant outlets where a brand is on sale) plays a major role in determining a brand’s penetration (i.e., the percentage of the population that purchases the brand). You might expect a fairly symmetric relationship between these two: higher availability means higher penetration, and vice versa. A closer investigation of more than 10,000 brands shows that the relationship is more nuanced: High distribution is a necessary but not a sufficient factor to reach high penetration. In other words, there are brands with high distribution, but low penetration, but no brands with low distribution and high penetration. The chart shows thresholds required to achieve certain penetration levels. Ignoring some outliers, 20% penetration requires at least 60% distribution, 50% penetration at least 80% distribution.