Calculation of market share for organizations and brands

Knowing your market share is vital information for decision making. The development of a company may look ideal: revenues are growing, profits are increasing. But growth can only be driven by market growth. Calculating your market share will allow you to understand whether the company is growing or lagging behind the market.

Market share is the most commonly tracked KPI. It serves as an objective indicator of business development and tracking the dynamics of demand for products.

Such calculations are important for understanding the competitive environment: determining your own positions and the positions of competitors. They are also carried out as a starting stage when planning the development of a new market segment.

In addition to the general one, it is also important to track the local shares of market participants (your own and competitors) in all regions of operation. This allows you to intelligently distribute the company’s efforts from the point of view of regional development.

In addition, calculating market share is a mandatory step when launching a new product or brand. And even if the indicator is small at the initial stage, it will provide a starting point for assessing the dynamics of further business development. The same procedure is carried out before launching a new brand.

The minimum size of a representative sample for assessing market share per region is 400 questionnaires, the number of expert interviews is at least 8-12 per region (if conducted). By region we mean any territory for which separate analytics is required (this could be, for example, a city or country). The minimum period for collecting data for the specified amount of data is 5 working days.

The cost of assessing market share consists of the cost of collecting a selected number of in-depth interviews, questionnaires (fees are charged only for fully completed questionnaires) and the cost of analytics (usually no more than 15% of the cost of data collection)

You can calculate the cost of one questionnaire yourself using our calculator (you will need to enter the number of open and closed questions in the questionnaire, quotas)

The cost of such a study is from 2000 £ (the cost is indicated for a minimum sample).

Market shares can be calculated based on:

- Financial indicators (billion rubles)
- natural indicators (for goods in units of measurement: tons, m3, etc.)
- size of the customer base (number of enterprises or people)

Every day new companies and brands enter the market, old ones leave, mergers and acquisitions, reorganizations occur, and the economic situation in the country changes. All this has an impact on the future performance of the company. Regular calculations of market share will allow you to monitor the situation and make timely decisions and successfully compete in the market.

Obtaining primary information for subsequent calculation of shares is carried out using quantitative methods. This is usually a survey of potential buyers that is conducted in person, over the phone, or online. After obtaining a sufficient amount of information for the segment of interest, further operations are carried out using methods of mathematical statistics. The study takes into account not only natural, but also financial indicators. Among commercial organizations, financial market share is the most in demand.

Often, in parallel with calculating market share for consumer markets, brand consumption intensity is calculated. The share segment of product sales largely depends on this. In this case, the Parfitt and Collins method is often used for calculation, based on operating with data obtained from a constant sample. The methodology is based on indicators of brand penetration (penetration) and the intensity of its consumption.

The indicator of the intensity of consumption of goods of a particular brand is considered as the ratio of the average indicators of the number of repeat purchases of this particular brand to the total indicator of the number of all purchases in a given group of goods. Thus, market share is calculated based on actual consumption figures.

As a rule, it is quite difficult to independently calculate the share of a market or brand; in this case, it is better to contact a marketing research agency that specializes in solving such problems. Specialists from the BCGroup research agency are ready to help carry out the necessary analysis.