Market Share
Market AnalysisContentsMarket sizeMarket shareMarket shareMarket
growthCompetitor analysisMarket segmentationMarket researchSampling
methods
Key termsMarket size the total number of sales in (value) or
quantity (volume) in a marketMarket share the % of a market an
individual business hasMarket growth the % increase in the size of
the market on an annual basis Market segment a section of consumers
in the market which share similar characteristicsMarket
analysisBusinesses use methods of market analysis to find out what
is happening in the marketThese tools allow them to develop
marketing strategies which exploit opportunities Market sizeThis
helps businesses decide the potential profitability in a
marketLarger markets tend to have more opportunities to make a
profitWhen a business is considering entering a new market they
will be interested in market size and the fierceness of competition
Market shareMarket share figures allow a business to compare
themselves to their competitorsIf the market is dominated by a
number of large companies e.g., Supermarkets such as tesco, asda,
Sainsbury's it is less attractive for new firms to aim at the
entire marketThe distribution of market share in a market is
influenced by the type of market that the business is operating in
(monopoly perfect competition)Market growthThis figure is crucial
for a businessMany attractive markets are relatively small and fast
growing therefore offering the potential of high profitsMarkets
that are growing at a rapid rate tend to attract lots of new
businesses Markets tend to grow the fastest at the beginning of the
product life cycleMarket growth / declineSometimes markets suffer
negative growth This often leads to companies leaving the market
Some businesses may be able to exploit opportunities and segments
using their own USPs when the market is entering into decline
Competitor AnalysisBusinesses need to have a good idea about their
competitors to enable them to develop valid and successful
marketing strategiesAlongside market share a business often
benchmarks their current / potential competitors in order to gain a
greater understanding of their offering Market Sharejournal Market
share Market share is the portion or percentage of sales of a
particular product or service in a given region that are controlled
by a company. example, there are 100 widgets sold in a country and
company A sells 43 of them, then company A has a 43% market share
Market ShareOr you sold widgets for a total cost of $860 and the
people in the country spend a total of $2,000 on the same widgets,
then the market share is $860/$2,000 or 43%The two different
methods of calculating market share won't always provide the same
answer,Market ShareMarket share is used by businesses to determine
their competitive strength in a sector as compared to other
companies in the same sector Method 1 Number of BuyersEstimate the
total number of buyers in your market and determine how successful
your competition isPer month, estimate the number of people that
will buy your product or serviceThis is your percentageMethod 1
Number of BuyersEx/ Organic Coffee HouseNumber of Tim Hortons
3040Market Share = 76% of Coffee and Baked GoodsTims Sells 3
million cups a day3,000,000/ 3,040 = 987 cups sold per day per
store987* 30 days = 29,605 per month29,605 / .76 = 38,954 cups a
month for a store to have 100% market share in their areaMethod 1
Number of BuyersOur Organic Coffee House should get 2% of the
market, based off of the following data (trends that support your
business) 2% of total market share or 779 cups sold a day38,954 *
0.02 = 779 cups sold a day
Method 2 Percent of SalesTotal Market Share of top 5 competitors
and average last five years of sales
Ex/ Organic Coffee HouseTop Five CompetitorsTim Hortons 76% -
Sales $14 billionStarbucks 7% - Sales $1.3 billionTimothys Coffees
World Inc 4% - Sales $736 millionSecond Cup 2% - Sales $386
millionWilliam's 1.5% - Sales $276 millionMethod 2 Percent of
SalesI think we can have a market share of 0.05% based on the
following data (trends)Market share of 0.05% = $ 9.2 million
sales
