Companies increase market share through innovation, strengthening customer relationships, smart hiring practices, and acquiring competitors. A company’s market share is the percentage it controls the total market for its products and services.
Understanding Market Share
It’s obvious to start with thinking and understanding in order to grab the market. And there’s a mathematical way to make you understood. Market share is calculated by measuring the percentage of sales or percentage of units a company has in the overall market. Well, it’s the basic formula! Let’s take an example out. Using the percentage of sales method, if a company has $1 million in annual sales and the total sales for the year in its industry are $100 million, the company’s market share is 1%. Under the percentage of units method, a company that sells 50,000 units annually in an industry where 5 million units are sold per year also has a market share of 1%.
Increasing Market Share
There’s one way to increase market share. If a company wants to do so it has to bring a new product or maybe technology in the market which may competitors have offered. Consumers will come to busy as they did business with the other competitors. In this case, loyalty matters a lot.
By strengthening customer relationships, companies protect their existing market share by preventing current customers from jumping ship when a competitor rolls out a hot new offer. Better still, companies can grow market share using the same simple tactic, as satisfied customers frequently speak of their positive experience to friends and relatives who then become new customers. Gaining market share via word of mouth increases a company’s revenues without concomitant increases in marketing expenses.
— Nusrat Afrin
Executive of Content Development Team