A company that has high market share is more successful than one with low market share. Why is that? Well, let’s explore the different factors that go into calculating market share percentage. We all know how important it is to have a good market share when you are running a business. If you want to be successful, you need to think of ways to increase your market share so that more people will come along and buy your products or services.
Even small businesses need to calculate their market share in order to know if they are being given enough resources, or if there are other funding opportunities available for growth. This article will outline the different types of market shares, as well as provide you with some insight into how much money each type of market share could potentially earn you.
What is Market Share Percentage?
Marketing departments are always trying to find new ways of increasing their reach. Increasing your marketing budget may not seem like the best way to go, but when you are just starting out, you may not have the money to put towards marketing. This can be a major problem when you are just starting out as a business, as you do not know how to measure success.
Marketing is the process of spreading your products or services through various channels in an attempt to increase the number of potential customers that you have. The basic principles of marketing are the same for any business, whether you are a large or small business – increase demand and decrease supply. In other words, you need to make your product or service more available and you need to make the people who are interested in your products or services more likely to buy them.
Why is Calculating Market Share So Important?
If you think about it, there are a few key reasons why you would want to calculate market share percentage. The first reason is so that you know how your efforts are doing. You need to be able to see how much of an impact your marketing campaigns are having, and what needs to be done next to reach the next level of success. Another important reason is to make sure you have a good grasp on what your competitors are doing. This way, you can learn to counter some of the more popular marketing techniques being used by your competitors, and come out on top in the end.
How to Calculate Market Share
To calculate market share percentage, you will need to know your target market, and the amount of products or services that they would buy from you. If you are starting out, you will likely have no idea what these numbers should be, so we will look at an example where we have no data to work with, but nonetheless, we can still calculate market share percentage. First, we will need to know what your ideal market is.
This will be the market of your customers, and the amount of products or services that they would buy from you. What is the market size for your industry? For example, in the U.S., the market size is $20 billion. This means that the market for your products or services will determine how much money you need to make in order to reach your ideal market size. Now, at this point, you will need to make some assumptions.
For example, assume that your market is the population between the ages of 18 and 35. How much income do they make on average? $35,000? $50,000? $75,000? Now, we will need to calculate the average income for this market. This will give us a rough idea of how much you need to make per year, per customer, to cover your expenses. If your market size is larger than average, you will need to increase your marketing budget. If not, you can assume that your market shares are quite high, and you can save yourself a considerable amount tome by calculating market share percentage.
Summing up
Marketing plays an essential role in any business’s growth. When you have a good market share, you are sending more of your products or services to more people, which means that more people will come to notice and begin to purchase your products or services.
There are 7 main factors that go into calculating market share percentage, and we will look at each one in turn. These are:
- The market size – This is the number of customers that you want to reach, and how much you will have to spend to get them.
- The amount of profit you need to make – This is the amount of money that you need to earn, and how often you need to make it.
- The rate at which you are earning profit – This is the amount of profit you receive each time a customer purchases your products or services.
- The competition – This is the number of competitors in your industry, and how much you need to spend in order to overcome them.
- The technologies used – This can either be a factor of whether your marketing campaigns use advertises or an indicator of the technologies used in your products.
- The distribution channel – This can either be a factor of how much you spend on marketing, or the number of sales you make.
- The programmatic buying channel – This is where you will need to calculate market share percentage, as it is the channel that you will most likely target.
The market share calculator is a handy tool to help you understand your market. It gives you a number for each type of market share that you have, as well as a percentage for each of the factors mentioned above.