In this discussion, we will review further about market share , starting from the definition, how to calculate it, to how to increase it. Read more below!
What is Market Share?
Market share is the percentage of total sales of a product or service in a market that is controlled by a particular company or brand .
Also known as market share, market share is the percentage of a company's total product sales compared to total sales in the same market. Thus, the definition of market share is the percentage of a company's or brand's sales over total sales in the industry.
This calculation only covers the market in the same industry, not the entire market. So if, for example, your business is in the smartphone industry , then its market share does not measure all existing smart device sales.
Reported from Airfocus , market share can buy phone number list be an important indicator in assessing a company's position in the market. The larger a company's market share, the greater its power in influencing prices, competition, and consumer behavior in that market.
But of course, market share is not always the only important factor in determining the success of a business.
Market Share Function for Business
After knowing what market share means , next we will review its function in business. Here are some functions of market share in various industries.
1. Show Business Scale
The first function of market share is to show the scale of your business. Market share can show where your business is located compared to other competitors in the industry.
By knowing how much percentage your brand controls the market, you can also see how big your market share gap is with other competing companies. This information can help you to develop the right strategy to reduce the gap .
2. Increase Sales
The next function of market share is to increase sales. High market share shows that your brand is chosen more by consumers than competitors ' brands . This can be a driver in increasing sales.
By being aware of market share, you can focus on growing it by meeting consumer needs. You can also develop effective marketing strategies and innovate in business.
3. Improve Brand Image
Market share also serves to improve the image or reputation of the company. People usually judge a company's reputation from how big its market share is. Companies that have a high market share or are able to dominate the market for years will be more trusted by consumers than other companies.
Consumers often even do free promotions or recommend brand products that have a high market share to other consumers, this will certainly increase the brand's reputation .
4. Save Marketing Costs
Furthermore, market share can also save your marketing costs. As a reflection of the success of a business, companies with high market share will benefit greatly. The company can also do marketing at a lower cost than other companies.
This happens because companies with high market share have a good reputation and are trusted by many consumers. Consumers who already trust the company will do word of mouth and give positive reviews about the product. That way, the company can get new consumers.
5. Facilitate the Negotiation Process
Market share can be a powerful tool for brands to negotiate with various parties such as suppliers or distributors. Suppliers and distributors tend to prioritize companies with large market shares to work with.
If your brand has a high market share , you will benefit by becoming the market leader and more trusted than other brands . This makes it very possible for you to get lower price offers from suppliers and distributors.
6. Knowing the Potential of New Consumers
Calculating market share means that you calculate how large a percentage of the market your product controls in the same industry.
By knowing the market share, you can also calculate how many percent of consumers are not yet in your market share. If your market share is still low, you have a great opportunity to reach new consumers.
7. Measuring Business Competitiveness
The percentage in market share shows the competitiveness of business between companies in the same industry. When your market share is lower than your competitors, you can analyze what your competitors are doing to become market leaders.
8. Become a Company Evaluation Material
The last function of market share is as a company evaluation material. You can see how well the business is performing by looking at the market share that has been achieved.
