Market Research: Market Share (E)
What is the market Share of the Company? What are the main ways of measuring the market share?
Posted: Mar 2010
The goal of every company is to achieve the all business goals. The main goals are sales volume, revenue, profit, etc. One of the most important indicators is the Market Share. The Market Share represent the sales share of the company, expressed by one of several measuring method.
The market share is measured in a several different ways, since everyone of them is expressing the different result dimension. The Market share can be expressed as volume share, value share and transaction share.
Volume Market Share - example: 30% of Beer market share means that X company owns the sale of 30 liters out of every 100 liters sold in the specific market.
Value Market Share - example 25% of Bottled Water share means that Y company sells 25% of value sold in the whole market.
Transactional Market Share - example 50% of Diary market share means that Z company sells 50% out of total bottles sold in the market.
It is easy to understand that every way of measuring the market share has different perspective of the market share.
The different perspectives of the same sales volume is giving a different information. for example, the company may have a high volume share but the value share may be small, in case that the unit price of their products is relatively small.
Therefore, it is necessary to take into account a different perspectives of measurement of the market share.