One of the main indicators used in assessing the competitiveness of companies is market share. This is a simple but objective indicator of the firm's performance. It may be that, at first glance, the company is developing just perfectly: profits are growing, the pace of sales is also increasing, becoming more and more recognizable. But if at the same time the market share is small, then the prospects for business development seem rather doubtful. Therefore, when analyzing marketing work The firm needs to track its market share as well as the market shares of its closest and/or strongest competitors.
where: D r- market share, %;
Q n- the volume of sales (sales) of our or another analyzed company. It can be calculated both in physical terms (pieces) and in value terms (rubles);
Qtot is the total volume of sales in the market. It can also be expressed both in pieces and in rubles.
There are 3 consumer electronics stores in the city. For the year, store A's sales were 15 million rubles, in store B - 20 million rubles, and in store C - 25 million rubles Calculate the market share for store A:
Thus, the market share of store A is 25% .
Scope of market share indicator
Market share allows you to evaluate two extremely important things. Firstly, the dynamics of the market share over the years shows the success of the company's development over time. Secondly, calculation and comparison of the market share of the company and other firms offering similar products in this region, shows the competitiveness of this company.
Peculiarities of the market share indicator
- market share can be calculated based on:
- cost indicators ( sales volumes in rub.);
- natural indicators ( sales volumes in pcs.);
- the number of clients.
- market share can be calculated both relative to the total sales volumes for the market as a whole, and relative to the sales volume of the strongest competitor (competitors).
Galyautdinov R.R.
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A marketing tool that has become traditional is the analysis of the company's market share. Thanks to the analysis, it is possible not only to assess the current or past activities of the company, but also to draw up perspective plan development. The data obtained as a result of the work of marketers will show where the company is in the market in relation to competitors.
The objectives of the analysis of the market share of the enterprise
An analysis of the market share of an enterprise as a marketing tool is usually used to achieve the following goals:
to increase the effectiveness of the fight against competitors in the market;
to gain a competitive advantage.
The data on the volume of own sales will not show the whole state of affairs in the market, will not give a complete understanding of what is happening with the enterprise and with the brands. Sales volumes may increase, but relative to the state of affairs in a rapidly developing market, these indicators may turn out to be negligible for the enterprise, if not negative. And it may be the other way around: the sales volumes of the enterprise are declining, but the analysis shows that the fall in total the market is coming even faster. So the company is in a pretty good position.
A similar situation is observed when comparing the enterprise with its main competitors. To fully understand the state of affairs, you need to compare your performance with that of other companies in the market.
An analysis of the company's market share is carried out on the basis of a specific segment base, which is determined by selecting competing products according to certain characteristics. The underlying market may include a territory, product group or product category, sometimes segmentation may be more detailed.
Assumptions on which an analysis of an enterprise's market share can be based:
External factors can have the same effect on goods manufactured different companies, but related to the same underlying market. First of all, these are the products most demanded by the consumer, seasonality, and other external factors.
The expansion of the segment by introducing a new product affects all participants in this market, after which there is a share redistribution of the market in relation to all products and manufacturers.
A similar effect is likely when a certain product is withdrawn from the underlying market.
To correctly calculate market share, you need to have certain data. Do not forget that it is quite difficult to collect detailed information on a specific market segment. Often, the solution to this problem involves working with many sources that can provide at least some information. useful information, it can be:
Federal Statistical Offices.
Manufacturers Association.
Trading networks carrying out retail sales.
Independent research.
analytical agencies.
In order to analyze the market share of an enterprise and give the most accurate assessment of the state of the market itself, you need to compare all the data at your disposal. This means that it is desirable to work with information taken from different sources, and not dwell on one of them.
How is the analysis of the market share of the enterprise
It is possible to obtain information showing the market share in quantitative terms by comparing the volume of sales and general data on sales volumes of products of this product group, calculating their percentage ratio.
Market share shows the effectiveness of the marketing service of the enterprise. Do not forget that today there is no methodology that can give the most accurate result, and which could be called universal and generally accepted in the world economy. An analysis of the market share of an enterprise can be carried out both in relation to the entire market, and to its part, a separate segment (that is, to that element in relation to which various market participants are actively competing).
If it is impossible to calculate data on sales volumes for a particular segment, the market share is determined by analyzing the following indicators:
Sales volumes of the closest competitors.
The main competitor or flagship of the market segment.
Today, the analysis of the market share of an enterprise can be carried out using several fairly effective methods. For example, the following:
In kind. The result is presented as a percentage: the number showing the number of units of goods sold by one particular enterprise is correlated with the volume of sales in this market (the same units are calculated).
In value terms. The way in which the result reflects the cost of the goods sold.
According to the method of Parfitt and Collins. A technique that consists in analyzing the intensity of brand use. In this case, information is processed that is obtained over a certain period of time as a result of working with individuals and companies (panel surveys). Data is collected regularly from real consumers of the product.
An analysis of the market share of an enterprise is carried out by calculations according to a formula in which all data are expressed as a percentage:
Brand Market Share = Brand Penetration * Repeat Purchase trademark* Intensity of brand consumption
Brand penetration is the number of consumers (in%) who once purchased the product of this brand, out of all consumers of the product presented by the company.
Repurchase of a trademark is an indicator of "loyalty" to a particular brand. It is calculated as a percentage of multiple purchases of products of this brand to a certain time period.
Brand consumption intensity is the average ratio of purchases by repeat consumers to the average purchases of all product groups in that category.
As a result of combining the first two methods, a rather convenient and uncomplicated formula is obtained:
Qn is the volume of sales of a particular company;
Qtotal is the total volume of the market.
It is worth noting that the calculations can be done in two ways:
in rubles (i.e. in value terms of profit);
in kind.
As a rule, when analyzing the market share of an enterprise, they prefer the value expression of the indicator, because the price per commodity unit is not always known, and it can differ greatly from that offered by competitors. As a result of differences, data in kind can be very, very inaccurate.
Example of Enterprise Market Share Analysis
Consider an elementary example of the analysis of the market share of an enterprise:
There are 4 companies in the city of N that manufacture garments: Strizh (with a monthly sales volume of 70 thousand rubles), Chaika (with a volume of 80 thousand rubles), Lastochka (85 thousand rubles). ) and Oriole (65 thousand rubles). The management of the Strizh company decided to determine the market share owned by their company. What is needed for this?
First you need to establish the total market size. This can be done by adding up the sums of the sales volumes of all the companies represented on it (it turns out 300 thousand rubles). This is Qtotal (the denominator of the above formula). It remains just to do the calculations: 70000: 300000 x 100% = 23%
It turns out that the market share of the Strizh company is 23%. What does it mean? Just what all companies in the city have N approximately equal market shares. Any conclusions about the company's activities can be drawn only if there is data on the dynamics of the market share and changes in its volume.
What factors influence the results of the analysis of the market share of the enterprise
The change in the share depends on such indicators as:
Market segmentation. The essence of segmentation is the distribution of consumers into categories that prefer to buy one product. This indicator will allow management to take the right decision about which product should be offered to the consumer, and which one is better not to exhibit at all. Market segmentation in some way affects the formation of the company's product portfolio (you can use the method-matrix of the Boston Advisory Group). The BCG model was the result research work specialists Boston Consulting Group in the fieldstrategic planning . The matrix is based on the representation of a kind of "life" cycle that goes through any product on the market. According to experts, the cycle consists of 4 stages: exit (product - "question"), growth (product - "leader"), maturity (product - "cash cow") and decline (product - "dog").
Competition- most important factor. Even at the stage of preparation for work, it is necessary to carry out. It is likely that the analysis of the company's market share will show the inappropriateness of entering a particular market due to insufficient resources.
There is such a concept as perfect competition". It refers to the type of industry market in which a large number of companies offer a standardized product and none of them is able to influence the formation of its price due to insufficient control over market share. In the case of perfect competition, the share of each company on the market does not exceed 1%, which is the reason for the impossibility of influencing the formation of the market price by increasing sales. Thus, if a standardized product lacking individuality is sold on the market, the company is not able to influence the price set by the market. It must take it "for granted", as a price formed by the market itself (as opposed to monopolistic competition).
If perfect competition has formed on the market, then none of the companies represented on it can see a competitor as a threat to their market share, which means that it considers it pointless to be interested in the production solutions of competing firms and carry out. Information about prices and approximate profits can be obtained by any company, therefore, the possibility of taking emergency measures when market conditions change is not ruled out. This is done by investing in some factors of production after the sale of others. Sellers are absolutely free to enter and leave the market, because there are no barriers to work. However, as well as nothing prevents the termination of the company.
Imperfect competition may arise in the market if at least one of the above requirements is violated.
Staff motivation. First of all, this refers to the motivational level of sales managers. An analysis of the market share of an enterprise shows a direct dependence on the efficiency of salespeople (the better they work, the higher the share).
An example is financial incentives. Such motivation consists in setting a certain level of sales, set by the manufacturer in front of the stores, in order to aim for high sales rates. The program is implemented by holding competitions between points of sale (shops), and the indicators can be either relative or absolute. For example, a store that sold more goods (as a percentage) during a set period of time compared to previous indicators can win the competition. Or, for example, won the store that made more sales compared to others outlets(shops) for a certain period of time.
Motivation through material incentives is aimed at increasing the market share, because thereby the sales themselves are encouraged, as a way of influencing the end consumer of the product.
Let's look at a few examples. A company operating in the food market motivated its staff in order to increase the sales space on the shelves at the time when new products so that the novelty is clearly visible to the buyer. Another company whose activities are related to the market household appliances, increased its income by almost 3 times after it carried out the motivation for the sales of washing machines in one of the largest retail chains. The conditions of the competition contained an indication of the reporting period during which the store had to sell maximum amount this item. If the sales figures reached the maximum mark in relation to the period that was set, then the winning store was given a material reward. Naturally, the sales results exceeded all expectations.
Strengthening positions in the international market. This indicator is rather controversial, but the management of reputable companies and corporations always pay attention to it. Special attention, making very big investment in advertising abroad. The thing is that companies that are popular on the world market are not classified according to nationality.
In order to analyze the market share of an enterprise, a large amount of information is required, which is not so easy to get. It is important to stock up on a database of information from trusted sources. Therefore, it is worth turning to professionals. The information and analytical company VVS is one of those that stood at the origins of the business of processing and adapting market statistics collected by federal agencies. The company has 19 years of experience in providing commodity market statistics as information for strategic decisions that reveal market demand. Main client categories: exporters, importers, manufacturers, participants commodity markets and B2B services business.
commercial vehicles and special equipment;
glass industry;
chemical and petrochemical industry;
Construction Materials;
medical equipment;
production of animal feed;
electrical engineering and others.
Quality in our business is, first of all, the accuracy and completeness of information. When you make a decision based on data that is, to put it mildly, wrong, how much will your loss be worth? Taking important strategic decisions, it is necessary to rely only on reliable statistical information. But how can you be sure that this information is correct? It can be checked! And we will give you such an opportunity.
The main competitive advantages of our company are:
- regarding sales of a number of closest competitors;
- relative to the market leader, leading competitor.
- in kind;
- in value terms.
- Sales of nearest competing firms.
- Market segment leader or leading competitor.
- The effectiveness of the fight in a competitive environment.
- Advantages in a competitive environment.
- State statistics.
- Manufacturers Associations.
- Retail retail chains.
- Independent research and analytical agencies.
Accuracy of data provision. The pre-selection of foreign trade deliveries, which are analyzed in the report, clearly coincides with the subject of the customer's request. Nothing extra and nothing missed. As a result, we get accurate calculations at the output. market indicators and market share of participants.
Preparation of reports on a turnkey basis and the convenience of working with them. Information is quickly perceived, as tables and graphs are simple and understandable. Aggregated data on market participants are summarized in the ratings of participants, market shares are calculated. As a result, the time for studying information is reduced and it is possible to immediately proceed to making decisions that are “on the surface”.
Market share characterizes the position of the company in the market relative to competitors. The quantitative indicator of market share is determined by the percentage ratio of sales volume indicators to the total sales volume of goods of the same category in the market.
Although the market share is the most important indicator marketing activities of a company, there is no universally accepted perfect method for measuring it. The company's share can be calculated both on the market as a whole and within a separate serviced segment. Segment served - part of the total market for which there is competition. In a situation where the volume of sales in the market as a whole is unknown, the share is determined relative to:
Market share can be determined in two ways:
Market share in real terms (in unit terms) - the number of units of a product sold by a particular company as a percentage of total sales in the market, expressed in the same units.
Market share by piece = Piece sales (quantity)
sales (%) Volume of unit sales in the entire market (number)
This formula can, of course, be modified to output either unit sales or total market unit sales for the other two variables, as shown below:
Unit Sales = Unit Sales Market Share (%) * Unit Sales Total Market
Market share in value terms (in sales volumes). Market share by sales volume differs from unit market share in that it reflects the prices at which goods are sold. In fact, a relatively simple way to calculate the relative price is to divide the market share by sales volume by the market share by unit sales.
Market share by volume =Sales volume (rub)
sales (%) Total sales in the market
Market share through brand consumption intensity known as Parfitt and Collins technique (P&C methodology). For the calculation, data from panel surveys (i.e., studies conducted on a constant sample of consumers) are used. The following calculation formula is applied (in %):
Brand Market Share = Brand Penetration * Brand Reacquisition * Brand Consumption Intensity.
brand penetration to the market is defined as the percentage of buyers of a given brand (who made a purchase at least once) of the total number of buyers who purchase goods to which this brand belongs in a certain period. Reacquisition of a brand characterizes the loyalty of consumers to this brand. It is defined as the percentage I of repeated purchases made by buyers for a certain period of those who have already purchased this brand at least once. brand consumption intensity is calculated as the ratio of the average amount of consumption of a given brand of repeat buyers to the average amount of consumption by all groups in this category of goods.
Market share is a traditional tool with which you can evaluate the performance of any enterprise, as well as predict further development prospects. This indicator shows what place the company occupies in the relevant market segment relative to its competitors.
It is worth noting that a quantitative display of market share can be obtained by calculating the percentage of sales to the total sales of products that belong to the same group.
Market share reflects how effective marketing activities runs the business. It should be noted that at the moment there is no universal method, unanimously adopted in the world economy, that allows to measure this indicator in a perfect way. The company's share can be calculated not only in the market, but also for a separate service segment, that is, that part of the market volume for which many companies are actively competing.
If the total sales in the corresponding market segment cannot be calculated, then share can be determined in relation to parameters such as:
What are the ways to calculate market share?
There are several effective ways by which you can correctly determine the share, namely:
in kind
The indicator is the number of commodity units that are sold by a certain enterprise as a percentage of the total market sales, which are expressed in the same units. In this case, you should use the following formula:
Market Share=Percentage Unit Sales/Amount of the same sales made in the market.
In value terms
The indicator in sales volumes differs from the first method by reflecting the cost at which products are sold. In this case, the calculation formula will look like this:
Market share=Sales in currency/Total sales in the market segment.
Through brand consumption intensity
This method also known as the P&C technique. To use the methodology of Parfitt and Collins, it is necessary to use information from panel surveys, which are conducted on the basis of a regular sample of real buyers. It is worth noting that the calculations are carried out as a percentage, and the formula looks like this:
Brand market share= Brand penetration * Brand repurchase * Brand consumption intensity.
Brand penetration is the percentage of consumers who purchase a brand at least once out of all consumers who make a purchase of the product to which the company belongs.
Repeat purchase reflects how committed consumers are to a brand. This indicator is calculated as the percentage of brand acquisitions that consumers have purchased more than once during a specified period of time.
Brand consumption intensity refers to the ratio of the average purchases of a company's products by repeat customers to the average consumption of all product groups represented in a particular category.
What are the goals of conducting a market share analysis?
Share analysis is carried out to determine two goals, in particular:
It should be noted that to determine the first goal, a small scale is most often used. market segmentation. In this case, it is necessary to analyze each segment, including territory, group, product category. In turn, to determine competitive advantage segments that are more aggregated should be applied. This will allow you to better understand the competitive capabilities of the company as a whole in the market.
How can you collect information about a particular market?
In order to correctly calculate market share, it is necessary to collect relevant data. It is worth considering that the collection of detailed information on the market segment is quite difficult task. There are a number of sources from which data can be obtained, in particular:
It is recommended not to dwell on one of them, but rather to collect available information from several sources. Then you should compare it, because only in this way can you correctly assess the state of the market.
The next step to achieve the cherished goal is to determine the relative market share (RMA) of the company for all SBAs, which is found by dividing the market share of the company under study for a particular SBA by the market share of the company - the closest competitor. The results are listed in the table.
Exist standard values for the ODR indicator. Based on the results entered in the table for each SDR, the position in the market is determined, which ranges from a minor participant to dominance. Then an auxiliary table is built, in which the total share of sales for each position is calculated.
Table 3 - The strength of the SBA organization
| №№ | SZH | Sales revenue, € million | The largest competitors of the organization in this SZH | Revenue from sales of the largest competitors, mln. | ODR SZH | Market position | Percentage of sales volume,% |
| Licensed stamps, RF | 220,1 | SABMiller | 120,3 | 1,83 | Pure leadership | 9,77 | |
| Licensed stamps, CIS | 145,1 | Heineken | 96,7 | 1,50 | Pure leadership | 6,44 | |
| Premium, RF | 365,3 | SUN InBev | 81,9 | 4,46 | domination | 16,21 | |
| Premium, CIS | 149,2 | Heineken | 214,8 | 0,69 | Follower | 6,62 | |
| Srednetsenovoy, RF | 512,4 | Heineken | 272,4 | 1,88 | Pure leadership | 22,74 | |
| Middle price, CIS | 307,3 | Obolon | 423,7 | 0,73 | Strong Follower | 13,64 | |
| Economical, RF | 108,1 | SUN InBev | 230,0 | 0,47 | Follower | 4,80 | |
| Economy, CIS | 63,2 | Obolon | 240,4 | 0,26 | Minor contributor | 2,81 | |
| Cheap, RF | 216,7 | SUN InBev | 209,6 | 1,03 | Minimum Leadership | 9,62 | |
| Cheap, CIS | 165,5 | Obolon | 214,8 | 0,77 | Strong Follower | 7,35 | |
| TOTAL | 2252,9 | 2104,6 | 100,0 |
ODR SZH = Sales revenue from largest competitors / Sales revenue
Percentage of Sales = Total Sales Revenue / Sales Revenue
Table 3.1 Practical value of the ODR indicator
Table 4 - Strength of positions
Based on the results of the first analyzes, preliminary conclusions can be drawn. As can be seen from Table 3, the largest revenue (36.38% of the total) is generated by the mid-price segment of beer (in the Russian Federation and the CIS), while in the Russian Federation this segment is unprofitable, and in the CIS it is simply unprofitable (from Table 2). However, this segment includes the most popular brands of Baltika beer, and due to the huge revenue, this segment takes on the lion's share of overhead costs and, having abandoned these SBAs, there is a high probability of loss of smaller zones. Premium beer brands sold in the Russian Federation distinguished themselves by high rates of profitability. In general, everything is in order with the profitability of the enterprise (the average level is 17.7% from Table 2).
Table 3 shows that SBAs located in the zone of net leadership bring the most revenue (about 40% - 4 SBAs out of 10), which is certainly a huge plus, but about 30% of revenue is brought by SBAs with strong followers and followers. This problem should be solved in the future.
Construction of the "Growth / Growth" matrix
The "Growth / Growth" matrix is built on the basis of the following data: the growth of the company for each SBA (along the abscissa) and the growth of the market (along the ordinate). Data provided by the marketing department.
Table 5 Initial data for constructing the Growth/Growth matrix
There would be the last column to make the fourth!
| №№ | SZH | Sales revenue, € million | Revenue growth rate | Market growth rate | Area size normalized to mean |
| Licensed stamps, RF | 220,1 | 34,2% | 11,4% | 0,977 | |
| Licensed stamps, CIS | 145,1 | 17,9% | 12,0% | 0,644 | |
| Premium, RF | 365,3 | 18,7% | 17,4% | 1,621 | |
| Premium, CIS | 149,2 | 7,5% | 12,0% | 0,662 | |
| Srednetsenovoy, RF | 512,4 | 18,3% | 23,6% | 2,274 | |
| Middle price, CIS | 307,3 | 16,5% | 19,8% | 1,364 | |
| Economical, RF | 108,1 | 18,3% | 23,3% | 0,480 | |
| Economy, CIS | 63,2 | 19,2% | 15,1% | 0,281 | |
| Cheap, RF | 216,7 | 24,1% | 24,0% | 0,962 | |
| Cheap, CIS | 165,5 | 15,5% | 23,2% | 0,735 |
fig.1 Matrix "Growth / Growth"
To analyze the dynamics of changes in the market share of Baltika, for each SBA, a table is built based on the results of the Growth / Growth matrix.
Table 5.1 - Analysis of the dynamics of changes in the company's ODR
It is worth noting that 41.51% of Baltika's SZH is threatened with a decrease in market share in the foreseeable future, provided that managers do not take adequate action. It is necessary to invest money received from profitable SBAs in the development of lagging behind (carrying out marketing activities, PR companies, etc.).
Building the BCG Matrix
To perform this analysis, data on the relative market share of SBAs and the rate of market growth are required. This information is already known.
Table 6. Initial data for constructing the BCG matrix
| №№ | SZH | Area size | ODR SZH | Market growth rate |
| Licensed stamps, RF | 0,977 | 1,830 | 11,4% | |
| Licensed stamps, CIS | 0,644 | 1,501 | 12,0% | |
| Premium, RF | 1,621 | 4,460 | 17,4% | |
| Premium, CIS | 0,662 | 0,695 | 12,0% | |
| Srednetsenovoy, RF | 2,274 | 1,881 | 23,6% | |
| Middle price, CIS | 1,364 | 0,725 | 19,8% | |
| Economical, RF | 0,480 | 0,470 | 23,3% | |
| Economy, CIS | 0,281 | 0,263 | 15,1% | |
| Cheap, RF | 0,962 | 1,034 | 24,0% | |
| Cheap, CIS | 0,735 | 0,770 | 23,2% |
fig.2 BCG matrix
The activities of the Baltika company are developing in the rapidly growing markets of Russia and neighboring countries, so among our SZH there will be no "Dogs" (which is a plus) and "Cash Cows" (which is a minus). All SBAs are growing at an average of 18% per year, the market share of all varies greatly. A sufficient number of "Difficult Children", some of which go to the "Stars" zone. Most of the revenue comes from SZH with a high market share, and this has a positive effect on the state of the company. However, one of the SBAs - Premium, RF - may lose its position and move into the "Cash Cows" zone.
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