Being a marketer, you need to understand the concept of market share so you have a clear idea of how your business ranks against the competition. Moreover, it also allows you to develop new marketing tactics to reach more prospective consumers, customers, and clients. In this article, we will take a look at what market share is, how you can calculate it, and discuss the strategies you can use to increase it.
What Is Market Share?
Market share refers to the percentage of an industry’s sales that a specific organization owns. Basically, it’s the share of total industry revenue that your business has brought about by selling your products and services. Businesses with a high market share are referred to as industry leaders and regarded as competition for those with a low share.
For instance, if you purchase 100 pencils and 80 of them are sold by Brand A, 15 from Brand B, and the remaining 5 from Brand C, Brand A has a market share of 80 percent and is the industry leader.
Calculating Market Share
If you already have sales data, determining your market share is going to be extremely simple. All you need to do is find your company’s total sales revenue for a specific period of time and then divide that figure by your industry’s total revenue for the same timeframe. After you get the answer, all you have to do is multiple the number with 100 to get the percentage of your market share.
Knowing your market share will give you a comprehensive understanding of how your business ranks in the rank. Moreover, it’s also beneficial to understand how you measure up to your direct competitors.
Tips to Increase Your Market Share
Here are some simple tactics you can use to increase your market share.
- Reduce Prices – An excellent way to become competitive in your industry is to reduce prices. In fact, this is the most straightforward technique to increase market share as customers usually search for the lowest-cost products.
- Add Innovative Features to Your Products – Businesses that are continuously innovating and incorporating the latest technology often witness increased market share. Innovative features and products help in attracting new customers, which is a sure technique to generate revenue.
- Delight Your Existing Customers – Another great way to increase your market share to work on existing customer relationships. By delighting the existing customer by offering outstanding experiences, you can enhance customer loyalty. Loyal customers often make a repeat purchase, which increases your company’s revenue and contribution to the total industry revenue.
Last Few Words
Whether you are just launching your business or have a well-established setup, you need to know your market share as it allows you to accomplish your business goals and get the success you desire.