An
important measurement in marketing management is market share. This
type of measurement involves estimating the company’s share of total
industry sales for products or product lines and market segments. Market
share is computed as follows with the measurement then presented as a
percentage.
Market share = Company sales Industry sales
Once market share is known, the leader may take measures to increase
existing share which obviously can increase profitability of the firm. How
can a marketing manager move to increase his market share? The answer
lies in the marketing strategy the firm will pursue. Selection of a specific
strategy depends on the firm’s marketing strengths and successes in the
past. More specifically, the decision to select a particular strategy and
various mix components depends upon a number of factors. Such factors
should have been uncovered in the situational analysis of the overall
marketing plan. They include the following:
Company mission and corporate goals and objectives
Product quality compared to that of competitors
Competitive track record
Size and growth rate of the markets to be considered
Profitability of the products and markets under consideration
Overall economic situation
Cost structure of the company as it relates to engineering and
production
Competitive strengths and weaknesses of the company in nonmarketing
areas
Cost of employing various marketing mix components and
activities
Factors such as these help determine the strategy that the marketing
manager employs. Table below shows in summary form the strategies that
may be adopted to expand market share.
