Growing Market Share Through Competitive Benchmarking
The rise of ecommerce and the decline of brand loyalty has made every consumer industry more competitive
Open-ended feedback in the form of product reviews, interviews, surveys, and even customer service transcripts can tell you a lot about consumer demographics, use cases, and expectations.
Read this guide to learn:
- What is market share and how to track and predict it
- How to pinpoint areas of opportunity to take market share from competitors
- How to influence consumer purchase behaviors through brand perception
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How To Grow Market Share
Market share, the percentage of an industry's total sales that is earned by a particular company over a specified time period, holds significant importance and serves as a key indicator of market competitiveness. It forms the very crux of a company's standing, determining not merely its growth but also its survival in a highly volatile marketplace.
Learning how to grow market share is one of the more daunting corporate challenges, because there is no ‘right’ way to do it. Executing a perfect blend of acumen, intelligence, and strategies becomes imperative for successful growth in market share. Specifically, protecting market share appears to be an essential strategy to maintain a substantial presence in a rapidly evolving market.
Protecting a market share strategy entails a dynamic approach of value enhancement, client satisfaction, and incessant innovation. It involves monitoring the shifts in customer preferences, idiosyncrasies, buying behaviors, and market dynamics to craft competitive offerings that resonate with your target market, thereby retaining customers and attracting newer ones.
A tactical approach to increase market share is competitive benchmarking. By comparing business performance metrics to industry peers, an organization can understand where it stands, identifying areas of improvement and implementing best practices to increase efficiency. This empowers the company to gain a competitive edge, defending its key markets, and consequently escalating its share.
Regaining market share after sustaining loss is complicated. Companies are constantly competing, losing and winning market shares as they tread complex market landscapes. Regaining lost market share calls for strategic interplays, comprehensive assessment of lost grounds, and an incisive action plan—one that aligns with consumer expectations and corporate objectives for a triumphant rebound.
Equipped with these insights, you can now view the above "how to increase market share pdf" resource for a detailed understanding of the topic, providing a holistic approach to increasing and protecting market share, and competitive benchmarking. This resource can be invaluable in assisting B2C brands strategize their growth, focusing on proactive marketing efforts and customer-centric approaches that ensure they not only survive but thrive in their industries.
What Is Market Share
Market share holds a significant place in the corporate world. At its very essence, market share is a metric that depicts the percentage of an industry's total sales that is earned by a particular company over a stipulated period. This measurement serves as an index of a company's size and the extent of its dominance within its industry.
The extent of a company's market share is crucial to its business plan. A high share in the market typically stands testament to the company's sales prowess and is often a reflection of its competitive advantage. So, having a clear understanding of market share in business plans is seminal for determining success.
The determination of this share in the market is not an abstruse, herculean task as it might first appear. A market share calculator - a tool which computes a company's portion of total sales in a market - is often used. The device is beneficial in making strategic business decisions by comparing the company's sales to those of its rivals. These calculators typically rely on total addressable market (TAM) analysis and industry sales data.
Just as a coin has two sides, market share, too, has several types. The types of market share include unit market share – calculated by dividing the total units sold by a company by the units sold in the market, and revenue market share – measured by calculating the company's total revenue versus the total revenue of the market.
Here is a quintessential example of market share from the soft drink industry. Coca-Cola, which owns more than 40% of the market share, is an example of a company that has successfully harnessed the power of effective marketing to outstrip its competitors.
Understanding market share is not just restricted to the business world but also permeates into the marketing realm. In marketing, market share serves as an excellent indicator of company stability, growth, and customer preference.
Market Share Formula
Assessing market share has become a quintessential part of strategizing business growth. The market share formula allows for a granular assessment of a company's stance in its niche market. To comprehend it further, the formula helps measure the percentage of a company’s total sales within a particular industry or market.
The formula evaluates all the sales made in a specific market and what percentage of these sales were made by the company in question. This particular tool helps discern one's position compared to competitors, thus becoming pivotal for the company's strategic planning and performance appraisal.
Consider a company intending to increase its market share from 20% to 30%. A reflection of this aspiration could entail product innovation, expansion of distribution channels, leveraging customer service, or even competitive pricing strategies. Using these methods, businesses can undoubtedly step up their game when it comes to gaining market share.
Using our preceding example, the horizontal growth from 20% to 30% is not just a numerical shift, but a predictive analysis. The analysis takes into consideration the tendencies of consumers, fluctuating market trends, and competitors' activity to inform the company's growth strategies.
Switching gears, enterprises often grapple with the question of ‘how to take market share from competitors?’ The answer is multifaceted; organizations can increase investments in marketing, develop customer-centric products, or leverage economies of scale. These tactics enable in siphoning off market share from rivals, thereby enhancing the firm's foothold in the industry.
Lastly, deliberating on the benefits of market share helps underline its significance. Businesses tasting a larger fraction of the market share pie enjoy numerous perks like cost efficiency, customer loyalty, and greater bargaining power with suppliers. Hence, possessing a larger market share not only boosts the business's reputation but also opens up pathways for extensive growth and development.
But just remember–market share is a moving target! So you always have to be monitoring customer sentiment for you and your competitors in order to understand the current landscape.