how to find a company's market share

A very significant variable for companies, investors and concern analysts today is market share. Yous as a marketer are aware of the pre-requisites for whatever business programme. It is to find the marketplace share of your competitors (and even of your company). You lot may face the obvious dubiousness - how to discover the market share of a company?

And then, you practice a Google search to find the market place share of a competitor. You calculate the full size of your market. I did the same for so many projects at my B-school. I opened Google, with a lot of hope and typed "How to find the market share of a company?".

And all I could find in even some of the all-time marketing websites & blogs were mere definitions & formulas. Such as- "how to find the market share of a company?" Facepalm.

Therefore, I decided to put this upwardly on my blog. It was partially as a rant and partially as a help for anyone else like me who is out there. For people trying hard to know how to detect the market place share of a company.

I volition give you lot a brief insight into market share. My focus will be on exploring what is market share primarily. Furthermore, what is the significance of market place share and how to mensurate it.

I volition also discuss most things like whether an organization should actually bother almost the market place share or non. In subsequent discussions, I will as well share strategies for protecting and increasing the market place share of a company.

What is Market Share?

As defined in Marketing Management book by Philip Kotler, market share is the higher-level of specific demand for your production.

Each company operates in a particular marketing surround, in a market segment with a detail ready of products. Therefore, the market place share of a production determines the demand for that item product, in a particular marketplace segment, given a particular marketing environment in a definite time period.

In the nearly simplest terms, as mentioned in this another insightful book on marketing metrics, the answer to what is market share might look to exist something every bit unproblematic equally "us/(us + they)". But what exactly practise we need to figure out here? Who is the "us" (which of our business, product category, or product) and who are "they" (which is determined by the market place segment).

Mathematically, this marketplace share definition comes up in two means.
One is market share by units, and the other 1 is marketplace share past revenue.

These market share formula, mathematically, suggest the answer to what is marketplace share. Market place share is the percentage of a specific company's sales (either in terms of units or revenue) out of total sales in a market over a specific time menstruation.

Now, exactly where in the marketplace value chain would you calculate the market share?

This is some other consideration that you need to be mindful off. I will talk over it later when I would share how to find the marketplace share of a company.

Market Share Revenue or Volume

The marketplace share tin be measured in volume (units) or in terms of revenue (₹ or $). Market share past book or units would requite the percentage of the number of units of a product sold past a company over the total number of units of that production (or similar products, as defined by y'all) sold in the industry.

Now, market place share by acquirement implies sales percentage of a company confronting the total dollars earned by the entire industry.

Both of these are hardly always the same. Simple heuristics would tell you that competitive pricing could result in lower market share by revenue when compared with the market share by book. We usually calculate market share in terms of revenue.

For service industries, we measure only acquirement whereas for product-based companies we tin can calculate both acquirement and units.

Importance of Marketplace Share

Understanding market place share would exist incomplete without knowing the importance & relevance of market place share in the marketing landscape. The following points will requite you lot a better understanding of this most used marketing metric.

1. Market Share is linked to amend profitability

The market share is one of the main determinants of concern profitability. Broadly there are three reasons or explanations of why a loftier market share is linked to higher profitability.

Economies of scale: Larger the market share, larger the visitor. Large companies exercise achieve better economies of calibration in diverse components of the business.
More market power: A larger concern commands higher marketplace ability. This allows it to have amend bargaining power and give shape to the market dynamics, pricing.
Quality of management: A higher market share and improve profitability, both, have one underlying reality i.due east. the quality of management. Farther, bigger companies attract meliorate talent, going forward.

In fact, from a project undertaken by the Marketing Science Plant on the Profit Impact of Marketing Strategies (PIMS) in 1971, suggest this very fact that a college market share is linked to higher return-on-investment (ROI) and college profitability.

2. Market Share is an important parameter of market demand

For you as a marketer, estimating the market demand is one of the preliminary exercises. The market share of various companies assist in determining the marketing landscape in the given segment. This helps in estimating the visitor demand leading to meliorate sales forecast.
Diverse tools such as Excel. SPSS etc are also used to efficiently calculate the sales forecast for a company.

It is likely that your takeaway from this give-and-take might be this very aspect of business planning. In a lot of business plans and B-schools' assignments, the initiation point is estimating the market & visitor need. For that purpose, market shares of the players become important.

iii. Marketplace Share is crucial in not-expansible markets

Not-expansible markets, every bit the name suggests, are those markets in which the overall market place size, or the size of pie, doesn't increase with the increase in industry marketing expenditure.

This has been quite beautifully explained in the Marketing Direction book by Philip Kotler by quoting the example of weekly garbage drove as an example of a non-expansible market.

Therefore, what if you piece of work for a company operating in a market in which the overall pie cannot abound? As a marketer you should take the primary demand and await for increasing your market place share in the pie.

The fact of the matter is that indeed, it is an important factor in identifying a company's performance. Nevertheless, information technology is non the but factor.

What does Market Share tell about a Visitor?

Economic analyses are conducted by measuring and surveying market shares. An increase in a company'due south market share shows less competition and loftier profitability. Elsewhere, a decrease in market share indicates better competition or a lack on the visitor's behalf.

However, market share is not the only thing that can tell everything about a company.
There are several factors that nosotros consider in creating a perfect impression.

1. Market place share tells you about the profitability of the company

A college market share improves the profitability of a visitor as it gives it an edge over its competitors. A visitor that has the highest share in a market is considered as the market leader. It tin expand its profits by increasing prices. It can be used to sympathise the success of a certain company in whatever market.

2. Market share tells you about the industry competitiveness

Also, the marketplace share distribution in an manufacture tells a lot about how competitive the market is. It tin reveal a lot nearly whether the industry is a monopoly, an oligopoly or an industry with a cut-throat competition

Mutual Myths about Market Share of a Visitor

However, as a smart marketer, you need to exist extremely careful and acute nearly how you lot interpret the market share. The fact is that market share is not a tell-all marketing metric. And this is true for pretty much every marketing metric out there.

1. Market share alone might not tell you nearly who is doing meliorate.

One example can exist Amazon and Flipkart. Flipkart had 51% of the market share in the Indian market place whereas Amazon had taken upwards 32% in the year 2018.

Only this factor alone cannot tell us how these giants are doing in the market. Amazon started its operations in India in 2013, Flipkart is in the Indian marketplace since 2007. These companies are going head-to-caput in the market and as of now, Amazon is closing in fast.
You can understand how Amazon rose to prominence gradually if yous go through the SWOT analysis of Amazon.

ii. Change in market share might mean nothing in an expansible marketplace

As mentioned higher up, an expansible market is one where the overall industry expenditure can increase the overall pie. (i.due east., the overall market size) What can happen in such a scenario? It'south possible that the concern of your visitor has increased in absolute terms along with a decrease in market place share. Why and so? Because the overall market size increased in the expansible market.

As you can notice, these factors are critical to the success of whatever visitor. Hence it is imperative that you are enlightened of - how to find the market share of a company?

How to Find the Market Share of a Company?

Information technology is adequately elementary to summate market place share. First, summate the full sales of the visitor in a time period. Then, calculate the total sales of the market in the same time period, and finally place information technology in the formula beneath and voila; you will have your reply.

Only only if actually finding the market share would exist as simple as that!

Unfortunately, marketing students at B-schools, marketers and consultants accept a hard time in finding out the same. And the reason for that is elementary. Where practise you find all the sales data of the market, let alone of that visitor?

Heck, if the company is private company instead of a publicly listed one, how practice yous fifty-fifty find the market share of a private company?

Frankly, I have been through this situation myself non only during my days at my business organisation schoolhouse, IIM Udaipur, but also during my job. It was painstaking to exercise searches afterwards searches on Google in trying to find market share.

Then, allow me share with you a few methods of finding the marketplace share of a company. I would likewise assist with finding out the total market size.

1. Await for Research Reports past appending "PDF" to your Search Query

This makes your search more distilled. You and I know that finding a data point like the marketplace share is not something that would show up on a random blog (like the one you are reading).

Therefore, try to sieve through all the information at get-go. Afterward, effort and get concord of some reports that would exist available in PDF course.

2. Explore SlideShare for Presentations on the Concern

There are a ton of presentations out at that place that B-school students and business professionals create.

Now, here is the thing. Near of them aren't quotable in your study or business concern plan.
Why is it so? Because most of them, would not have quoted their sources in the offset place. However, such presentations will give you an idea about what the ballpark number could exist.

3. Focus on Total Addressable Market instead of Market place Size

Assume that you lot are looking for the market share of a company just to become know the market size. Then my recommendation would exist to focus on finding your Total Addressable Market place (TAM) instead.

TAM is a commonly a simplified calculation. It involves multiplying the price of your product with the number of customers in your segments. This is straight and straight-forrard.

Here, you are simply finding the number of customers coming under you target segment(s) and defining your market size accordingly.

4. Use a Representative Sample

This is a technique in common use for quite of lot of B-school projects and partly in manufacture.

Say yous are unable to find the truthful information for market share of companies in a particular market. What can you lot come upward with in this situation? You can always run a survey correct in that segment seeking answers to questions like "Which brand exercise you use?" or "Which brand are would you go for if you were to purchase this product?".

Finally, the results of this representative can be spelled out as the market share for the company. Obviously, the sample size should be statistically relevant, and all of the people should exist from the target segment. Hopefully, you accept now gathered the knowledge to answer this – How to notice the marketplace share of a company?

Factors Affecting Market place Share of a Company

Market share is a representation of a company's performance. Ultimately, the factors that affect operation are the same factors that bear on a visitor'southward share more or less.

High performing companies work on innovation, client relationships, efficient hiring practices, fifty-fifty acquiring their competitors. Uber bought Careem, its biggest competitor in the Middle East. Similarly, Amazon acquired Souq . com in the Heart East, as well.

A prime number instance of market penetration is Ebix, an Atlanta-based software firm, it recently signed an agreement to acquire Indian online travel company Yatra.

Competitor analysis is a key part of surviving in a market. There are a few bones but primal elements that immensely bear upon a company's market place share, when washed right; these tin can take a company to the highest levels.

Decision

In brusk, the marketplace share of a company is a mensurate of its progress or regress depending on an increment or decrease in market share, respectively. Once more, I did highlight that information technology is just one of the measures. Actually, using it to decide the position of a visitor or a make may be a futile do. I touched down upon relevant methods regarding how to notice the market share of a visitor.

I have tried to highlight that if you are trying to evaluate the market place share of a company then you have a few things that y'all tin can do which can fill in for the lack of real data.

Also, why don't you come with creative ways about how to observe the market place share of a visitor? Utilise the limitation that you can just not go hold of much data. I would be happy to include some of the best ones in the blog.

Source: https://www.superheuristics.com/how-to-find-market-share/

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