This article will explore what market share is and how it can help you succeed in the competitive industry. We will also discuss some of the best ways to gain market share from your competitors.
What is Market Share?
Market share is a term used by marketing professionals to describe the percentage of total sales or production that a company has within its given industry. For example, if Company A had 20% of the market for widgets and Company B had 10%. Company A would have twice as much market share as Company B. Market Share can be calculated using any data, including revenue numbers or number of employees on staff. Marketing professionals often use this metric to compare companies against their competition and determine which is more successful than others in the market.
Market Share in Business
Market share is an essential metric for businesses to track because it helps companies better understand their business success, regardless of whether they are public or privately held. Market share can also help marketing professionals determine which products and services are most popular within the industry. If your company has more than 50% of the market share, you are in a powerful position because your company essentially dictates the industry standard. If, for instance, Company A had 50% of the market share and Company B had 30%, it means that Company A has much more influence over business standards than does Company B. Without Market Share, consumers would have no way to differentiate between companies in the same industry and would essentially be forced to choose randomly.
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Market Share vs. Market Positioning
It is important not to confuse market share with marketing positioning, although they are related concepts. Marketing professionals use marketing positioning within their companies to help them stand out from competitors in a way that makes sense for consumers. A marketing position aims to help your company become more popular and to attract new customers. One of the main benefits of a marketing position is that it enables you to gain brand loyalty, which companies want to maintain a substantial market share against competitors.
What Can Market Share Tell us?
When we see at things from the perspective of the market share, we learn several valuable lessons. For one, we can understand what consumers are looking for in terms of products and services. We also get a better idea about which companies have the stronger pull to bring in revenue faster than their competitors. Finally, market share is an indicator to help businesses track where consumer attention lies within each industry sector.
How do you Gain Market Share?
Here are some of the best ways to gain market share from your competitors.
Develop a Better Product or Service
One way you can get consumers’ attention is by having an innovative idea that appeals to them. If you have something more unique than what has already been done, this might be enough for new customers to attract your company.
Incorporate Social Media
Social Media can effectively get people talking about your business and growing market share against competitors. Instagram, Facebook, Twitter are all great tools that allow companies to share their ideas with a larger audience to become more popular.
Target the Right Demographics
If your company is targeting the wrong demographic with its products and services, you will not have much success growing in terms of market share. It would help if you found out who exactly you want to be selling your goods or services to become customers for life.
If several companies are offering similar things within an industry, you need to find a way to be unique so people can choose your company over the others. This is an essential aspect of gaining market share. If all companies offer similar products and services, consumers will have no reason not to shop around until they find what they want at the lowest price available.
Find Out Where your Market Share is Weak
It’s not enough to find out where your strengths are, and you also need to know exactly where your weaknesses lie so that you can keep track of them and begin working on improving them. Consumers will go elsewhere if they do not feel satisfied with the company’s goods or services, making it essential for businesses to monitor their market share continuously.
Strengthening Customer Relationships
Customer bond-making is the process by which companies form connections with their customers. The company aims to establish a customer bond system to protect their existing market and ensure no loss of the current product customers due to high competition. This also increases customer experience, which increases the customer base through word of mouth. Customers Bonds provides a method to protect their existing customer relations.
Innovation can take the form of product innovation or production method invention or introduce a new technological solution or service that competitors have yet to offer into the market. Investing in technology gives a company advantage over others and allows its clients to stay ahead. This innovation process is the primary way to increase market share I i.a.
Increased Bargaining Power
With an expanded market share, a company can use certain functions, including a higher bargaining power. It begins to enjoy a better position and can negotiate to its advantage with suppliers and their distribution channels. With increasing control over the industry, a company can enjoy a monopoly position in the negotiable space.
The companies may also expand their market shares through lower prices. Lowering the cost of raw materials attracts more customers, widens the customer base, and boosts sales, improving market shares.
Acquired competitors is a sure way to establish dominance in an industry. By acquiring a competitor, a company acquires additional customers and reduced competition. Thus, acquitting a competitor reduces competition and helps establish a dominant position within the industry.
Impact of Market Share
Increasing the market share may allow the company to expand into broader market size and improve profitability. In addition, it helps the company maintain a cost advantage comparing competitors.
Consumers are increasingly conscious of the quality of products as well as their price. Therefore, creating high-quality standards helps businesses grow their market share.
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How to Calculate Market Share?
There are various ways to calculate the market share of competing companies, but one of the most common is by using what’s known as a “penetration index.” A penetration index measures how many consumers buy products or services from specific industries based on certain demographics. For example, if a company is conducting a survey on their target market and finds that 50% of those surveyed have bought something from them, then this would be the same as saying that half of those surveyed are part of their market share. This number can also tell businesses how many people buy goods or services from competing companies within an industry.
- To calculate market share, you will need to know the total number of customers in a specific region or industry.
- It would help if you also found out how many customers are buying from competing companies. This can be done through surveys or finding out what other relevant statistics say about your company compared to your competitors, such as sales volume, market growth rate, etc.
- Once you have all of this information, take the number of customers buying from your competitors and divide it by the total number of customers within your particular industry. This will then give you an idea about what percentage of market share is owned by competing businesses.
If you are looking for a way to gain market share from your competitors, keep reading! We will provide you with some tips on how you can increase sales by using the power of human psychology. You may also want to read our blog post about understanding customers’ needs and wants more effectively. Happy with what you have got? Read more of our blog posts!
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