There are lots of ways of looking at market share
It would be a mistake for a firm to rely upon one market share measure only. Assuming that the firm has access to competitive sales information, then a variety of market share metrics should be calculated and reviewed.
Market shares a very easy to calculate – indeed there is a free Excel template available on this site – therefore, there is minimal effort in calculating additional information.
Variations of market share
A firm should probably look to have market shares for:
The overall market
- Helps understand the firm’s position in the entire market
- Provides a benchmark for evaluating the effectiveness of marketing strategies and identifying potential growth opportunities
- Enables comparison with competitors and industry trends
Find out more: Do I Need to Measure Market Share?
Key segments of consumers
- Allows the identification of high-potential market segments
- Assists in tailoring marketing efforts to specific customer groups
- Helps allocate resources efficiently by focusing on segments with the highest growth potential and profitability
Geographic areas and/or markets
- Facilitates regional targeting and localization of marketing activities
- Enables the assessment of regional demand variations and customization of products or services
- Helps identify regional competitors and potential partnerships or distribution channels
By channel and/or retailer
- Aids in understanding the distribution landscape and channel performance
- Guides the allocation of resources across different sales channels
- Allows for effective channel management and optimization of distribution strategies
Against key competitors
- Provides insights into the relative market position compared to direct competitors
- Helps identify competitive advantages or areas for improvement
- Assists in benchmarking marketing strategies against competitors and identifying opportunities for differentiation
- Enables the assessment of changes in market dynamics
- Helps identify shifts in market concentration and the emergence of new players
- Assists in evaluating the effectiveness of market expansion or consolidation strategies
Market shares over time (trends)
- Allows tracking of market share performance over different time periods
- Helps identify patterns, seasonality, and market trends
- Assists in assessing the success of marketing initiatives and predicting future market share changes
Market shares for the overall brand and individual products
- Assists in brand portfolio management and resource allocation
- Provides insights into the performance of individual products or product lines
- Helps identify opportunities for product diversification or rationalization
Different definitions of the market
For example for a soft drink firm – colas, sugar/diet, all flavors, all beverages, etc.
- Allows evaluation of market share in various product categories or subcategories
- Provides a deeper understanding of specific market segments and consumer preferences
- Helps identify growth opportunities and potential areas of expansion
Reasons We As (As Marketers) Should Drill Down on Market Shares
A marketer should review more than one type of market share for several important reasons. By analyzing multiple market share metrics, marketers can gain a holistic understanding of their company’s position in the market, identify growth opportunities, and make informed strategic decisions.
1. Comprehensive Market Insights:
Relying on a single market share measure can provide a limited perspective on the market landscape. Different metrics offer unique insights into various aspects of the business, such as overall market performance, consumer segments, geographic variations, distribution channels, and competitors.
By reviewing multiple types of market share, marketers can develop a comprehensive understanding of their market position and identify specific areas of strength and weakness.
2. Targeted Marketing Strategies:
Different customer segments may have distinct preferences and behaviors. Analyzing market shares by key segments allows marketers to tailor their strategies and messaging to specific target groups.
This targeted approach enhances the effectiveness of marketing campaigns, leading to better customer engagement, increased sales, and improved customer satisfaction.
3. Geographic Relevance:
Markets can vary significantly across different regions. Analyzing market shares by geographic areas provides valuable insights into regional demand patterns, cultural preferences, and local competition.
This information enables marketers to customize their offerings, distribution strategies, and promotional activities to specific regions, maximizing their impact and market penetration.
4. Competitive Analysis:
Examining market share against key competitors is crucial for understanding relative performance. It helps identify competitive advantages, areas for improvement, and opportunities for differentiation.
By benchmarking against competitors, marketers can refine their strategies, identify gaps in the market, and develop unique value propositions that resonate with customers.
5. Long-Term Trends:
Monitoring market share trends over time allows marketers to track the effectiveness of their strategies and adapt to evolving market conditions. It provides insights into market dynamics, seasonality, and shifts in consumer preferences.
By identifying long-term trends, marketers can anticipate changes in the market, proactively adjust their strategies, and seize new growth opportunities.
6. Portfolio Optimization:
Evaluating market share at different levels, such as overall brand and individual products, helps marketers manage their product portfolio effectively.
It enables them to allocate resources efficiently, identify underperforming products or segments, and make informed decisions regarding product diversification, expansion, or rationalization.
Related Information
- Do I Need to Measure Market Share?
- Understanding Share of Hearts Metrics
- Should I Use Unit or Revenue Market Shares?
- Why Use Relative Market Share?
- Using Relative Market Share in the BCG Matrix
External website
Cluster Analysis for Marketing – provides a free template to create key consumer segments
