What is the market share?

The market share It is the fraction or proportion of claimants who specifically consume the products or services of a certain company. Understanding that there is a general market that is divided by the participation of different companies and consumers, The area or fraction that each company covers according to its sales is what is known as its market share or participation in the market.

Bliss market share at the same time it is closely related to marketing, it is evident as factors such as the popularity of the brand, market segmentation, the geographic location of potential clients can be decisive when it comes to reaching a market share.

For example, a company that sells 100 million cars a year in a certain country, when the total sale of cars sold in that country that same year has been 400 million. This means that the market share of the company is 0.4 which corresponds to 25%.

How is market share calculated?

Based on the product, the quota or market share it can be calculated based on units sold or conceived income from sales.

Market share by units = company sales (Total Units) / Total sales in the market (in units)

Market share by revenue = Sales of the company (in monetary units) / Total sales in the market (in monetary units).

There are some steps to follow when calculating the market share:

Step 1: Defining a time period

The first thing is to set the time in which the sales will be examined, it is very important and decisive to determine a period of valuation and participation analysis.

Step 2: Calculate Total Sales

First of all, here you have to consider the number of products that the company sells, whether it sells a single product or a diversified portfolio.

It is necessary to carry out a study for each specific product, to determine the market share against the competition.

In companies with a single production, the question is simpler and the calculation of market share is considerably simplified for more than obvious reasons.

Step 3: Calculation of the total sales of the reference market

In order to make this calculation, it is clear that it is necessary to include a comparative element, it can be based on the collection of information from the largest companies, which is more relevant and then the sales made by residual companies, will have less importance.

Step 4: Sales that the company has among the market

Now is the time to turn to simple mathematics, making the division between the sales made by the company under study among the sales made entirely in the market where said company is immersed business.

The result obtained from this operation is called specific market share.

How to increase market share

There are different tools that the company uses to increase its market share or market share in the face of competition, among these are:

It covers three basic ways for a company to grow its market share

• Get new clients

Whether it is taking customers away from the competition, it is the simplest possibility when applying an imitation strategy.

• Product diversification

It is a magnificent growth strategyIn this way, the company increases its overall results, tries to increase making its products are consumed in greater quantity by the customers it already has.

• Develop another market

It is another way to increase market share, it is about developing a non-existent market for the company, which can also be quite interesting since the main competitors are absent in the.