Growing upwardly, I used to play "grocery store" with my sister. We'd get into our pantry, take out all the food, and set a grocery store in our living room. I would typically "purchase" goldfish.

Yous might be thinking, "What does this have to do with market share?"

Well, let'due south say that I bought 10 bags of goldfish from various "companies" that my sister, mom, and dad endemic. If 3 of those bags were my sister'southward goldfish, that would hateful that she had a 30% market share of my goldfish.

Put simply, that is market share. Simply how does that impact marketers?

As marketers, it's important to understand marketplace share then y'all know how your visitor ranks against competitors and can develop new marketing strategies to reach more potential customers. In this post, we'll outline what market place share is, how to calculate it, requite real life examples, and explain how you can increase yours.

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What is market place share?

Market share is the percentage of an manufacture's sales that a detail company owns. Essentially, it is the share of total industry acquirement that your business concern has generated from selling your products and services. Businesses with larger market shares are industry leaders and competition for smaller companies.

You lot tin can retrieve of information technology similar this: if consumers buy 100 t-shirts and 70 of them are from visitor A, 25 from company B, and 5 are from company C, Visitor A owns a market share of seventy% and is the leading industry competitor.

Marketplace share is typically calculated for a specific time period, like yearly or quarterly sales, and is sometimes separated past region.

How to Summate Market Share

Since you likely already track sales information, calculating your market share is a straightforward process. Simply notice your business's total sales revenue for your preferred time catamenia and divide that number by your industry's total acquirement during the same period. Once you take this result, multiply the number past 100 to generate your market share percentage.

Market Share Formula

formula that you can use to find your business market share

Computing your market share will give you an overall understanding of your position in the industry, but it's also helpful to understand how you measure up to your straight competitors.

Relative Market Share

Relative market place share is a fashion to compare your performance to manufacture leaders.

Rather than using total industry revenue, you're dividing your marketplace share by your top industry competitors marketplace share, and multiplying the result by 100. The consequence will prove yous the portion of the marketplace y'all ain in relation to your largest competitor. The image below shows the relative market share formula.

Relative Market place Share Formula

mathematical formula that is used to calculate your business relative market share

Market Share Examples

It may be easier to understand market place share with real-life examples, and then nosotros'll get over some below for businesses you may already exist familiar with.

Nike Market Share

Nike is role of the athletic footwear and apparel industry selling a wide variety of sports equipment, casual shoes, and accessories.

With footwear alone, Nike's global market place share is estimated to be 29.25%. The brand is an industry competitor for Adidas and Nether Armour.

Tesla Market Share

Tesla is part of the automotive industry and it produces electric vehicles (EV). Within the EV industry, Tesla holds an 18% market share.

While that number may seem pocket-sized, it's important to recognize that the market for EV worldwide is significantly smaller than standard vehicles. EV'due south market share in the automobile industry is 2.viii% and Tesla'south is .8% . These differences are meaning, which is why it is important to clarify relative market share to compare your business to your direct competitors, rather than just the market place as a whole.

Google Market Share

Google has a market share of 91.86%, making it the most popular search engine in the world. Information technology dominates the competition, as the second-largest industry leader is Bing with a marketplace share of only two.71%.

Once you've calculated your market share and understand how yous relate to your industry competitors, yous can begin strategizing how to increase your overall revenue.

How To Expand Your Market Share

Below are a few strategies your company tin can utilize to expand your market share.

ane. Lower prices.

A dandy way to compete in your industry is to offering low prices. This is the depression-hanging fruit of expanding your market share because consumers typically await for lower cost products.

Even so, information technology'due south also important to notation being the cheap option isn't the right move for every brand. Y'all want to ensure that you're pricing products appropriately in terms of providing value to customers, but not losing out on revenue opportunities for the sake of beating out the contest.

ii. Introduce new products and features.

Companies that are innovating and bringing new engineering science to the tabular array often see their market share increase.

New products and features attract new customers, a.chiliad.a conquering , which is a driving gene for generating acquirement. New customers brand new purchases and, in plow, contribute to higher profit margins and larger contributions to overall industry revenue. Larger contributions directly translate to increased market share.

3. Delight your customers.

I of the all-time ways to grow your market share is to work on existing client relationships.

By delighting current customers past providing exceptional experiences, you tin can inspire client loyalty . Loyal customers are more than probable to make repeat purchases, which increases your business organization revenue and contribution to total industry revenue. As mentioned above, college revenue contributions equals a higher market share pct.

4. Increase brand awareness.

Branding awareness and national marketing play a large role in capturing market place share. Information technology's important to get your proper name out at that place so customers know who you are. Becoming a household name and the preferred brand in an industry will help increase your market share.

Generally, larger companies have the highest market place share considering they tin provide products and services more than efficiently and effectively.

But, why is this so important? Below, let'south figure out what touch market share tin can accept on your visitor.

Why is market share of import?

Calculating market place share lets companies know how competitive they are in their industry. Additionally, the more marketplace share a visitor has, typically the more innovative, appealing, and marketable they are.

Market share is more important in industries that are based on discretionary income. In industries that are constantly growing, market share doesn't ever have a large impact. However, it's important to go on in listen that a company tin can have too much market share — also known as a monopoly.

For example, with growing industries, which have a growing available market place share, companies can notwithstanding increment their sales even if they are losing market place share.

On the other hand, with discretionary income industries, such as travel or non-essential goods similar entertainment and leisure, the economic system can take a major touch on on market share. Sales and margins can vary depending on the time of year, significant that competition is always at an all-time high.

Higher competition often leads to risky strategies. For instance, companies might be willing to lose coin temporarily in social club to forcefulness competitors out of the industry and gain more of the market share. Once they accept more marketplace share, they tin can enhance prices.

Understand Your Market Share to Increase Business Success

Lower market place shares tin can let y'all know that you need to focus on customer conquering, marketing to raise brand awareness, and overall strategies to increase revenue. Higher percentages indicate that your electric current strategy is effective, and y'all should focus your efforts on customer retention and product innovation.

Whether your company is well-established or just starting out, it's important to empathize your business' industry standing as it will aid yous meet concern objectives and achieve desired success.

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Originally published Mar 25, 2021 7:00:00 AM, updated November 05 2021