What is market share? This is an important goal in business activities in any field. Determining the correct market share will help you have the right marketing strategies. Knowing how to expand market share helps businesses improve competitiveness and dominate the market. Let's learn the concepts and secrets of maximizing market share through Tanca.

What is market share?

Market share is a concept used to refer to the percentage of consumption of products and services that a business is dominating in the market. Market share is an important indicator to evaluate a business's competitiveness compared to competitors in the same industry.

Units with high market share will often have high revenue levels and also have more competitive advantages. In any business field, the more market share a business gains, it proves that it has more advantages in the market.

To capture more market share requires business owners to have effective overall business and marketing strategies. At the same time, after gaining market share, you need to have a plan to protect your market share.

The formula to calculate specific market share is as follows:

Market share = Total business sales / Total market sales.

Or:

Market share = Total products sold by the business / Total products consumed by the market.

For example: The main business product of enterprise A is an online course. The total market share of courses sold is 1,000 courses, of which Business A sells 200 courses. So it can be said that business A accounts for 20% of the online course market share.

Some important notes on how to calculate market share are as follows:

Business owners should be careful to collect the most accurate data possible. This will lead to realistic results and contribute to more effective assessments.
Market share will represent the percentage of products/services consumed throughout the industry during a specified period of time. Therefore, time will be calculated in months or years.
The unit of measurement for market share must be consistent.

Market share plays an extremely important role for any size business. Below are 3 great benefits that market share brings to businesses.

Determine competitiveness

Through determining the market share that the business is occupying in the market. Businesses can know their competitiveness and position compared to their competitors. From there, you can easily implement effective marketing and sales plans.

Determine growth rate

Based on the amount of market share achieved, business owners can measure the level of development of the business. Having a lot of market share proves that the growth rate of the business is good and effective.

If the market share of the business is low, it can be seen that the growth rate is low, so there needs to be an effective plan to promote and increase revenue.

Basis for building human resources

Based on the amount of market share that the business occupies in the market, the business owner can develop a plan to supplement human resources when necessary. Or have policies that create motivation to promote business development.

When a business's market share data is low, it is necessary to supplement appropriate human resources to implement reform strategies to increase effective market share.

In cases where market share is high, incentive programs are also needed to further promote existing advantages.

It can be seen that determining market share brings great benefits to the growth rate of a business. Especially in the current economic recession context.

Therefore, many people will ask how to effectively identify and increase market share. To do this, businesses can research and implement the following options:

Using BCG - Boston Consulting Group

The BCG model or Boston Consulting Group matrix is a method that businesses use to consider growth opportunities by market share, in which the matrix is divided into 4 parts:

Stars: A group of products that are positively and strongly received by the market. In this group, businesses need to promote growth investment to speed up market domination. From there, it brings highly effective revenue.

Question mark: This is a newly launched product group of the business. At this time, businesses need to have market exploration strategies to analyze customer reactions to the company's products and services.

If the product receives good signals, it should promote marketing and be classified as a star, but if the product cannot be sold, it should be classified as a black dog.

Black Dog: This is a group that does not bring value to the business. Therefore, you should not invest more in advertising and marketing budget for this group. Businesses need to have a plan to eliminate product groups. Moisten the squid dog as soon as possible to avoid cost loss.

Dairy cattle: Product group with little opportunity for further development but still has market share and still brings in significant revenue. Businesses need to maintain this group at a moderate level to avoid losing market share to competitors.

Besides using the BCG model, businesses can use a simple market share formula to determine the market share the business holds.

The formula for calculating request share is as follows

Option 1: Market share = Total sales/Total market sales
Option 2: Market share = Total products sold by the business/Total products consumed in the market

What is the way to maximize market share?

To effectively increase market share, businesses can follow the three common ways below.

Enhance customer experience

Today, businesses that can provide good customer service and enhance customer experience when shopping will be able to capture a large market share.

When customers feel satisfied with your products and services, they will feel respected. When there is a new product, this group of customers will be the first to return to buy it.

Develop a competitive pricing strategy

To increase market share, many businesses have researched and implemented competitive pricing strategies to attract more customers to shop. From there, effectively increase product sales and improve overall revenue.

To have an appropriate pricing policy, businesses need to consider factors that have a direct impact. Such as target market, production costs, brand, competitors or product quality.

Buy from a competitor

Buying back market share from competitors is the fastest method of increasing market share today. While directly winning existing customers from rival companies, while reducing the number of direct competitors in the market.

From there, the business's market share will be developed and guaranteed. A small note when using this form is that it requires businesses to have large costs as well as reasonable and appropriate calculations.

Thus, through the article on Tanca, we have introduced to readers the concept of market share. And the method of identifying and expanding market share has been applied successfully. How important is the role of market share in business growth? Hope to provide you with a lot of useful knowledge.