Understanding Market Share Goals and How to Increase It

Rancakmedia.com – Understanding market share is basically part of all requests for products that describe consumer groupings depending on certain features. You must know the expression Market share for those of you who have been in business for a long time or work for big business.

Of course, this fundamental phrase has been understood, understood, and applied by business people because market share affects the success of the company, but not a few do not understand this market share.

Basically, market share is the proportion of markets or customers that a business accounts for in a particular industry market. Marketers must be in a position to translate and incorporate sales objectives into this market share to demonstrate whether predictions are achieved by increasing the market or taking market share from current competitors.

This market share is part of the market that can be controlled by business actors and potential that can be reached. This market shadow also represents the segmentation of consumers based on income, gender, age, social position, and education. This is where the withdrawal and reading of market share information is known.

Explanation Regarding Market Share

Market share is basically a share of all the demand for the product which describes the grouping of consumers depending on certain features. Customers can be classified according to income, gender, age, social position and education.

Market share can also be understood as a share of the company's market and all of its sales potential which is usually expressed as a percentage. Market share also implies the total sales value of the company from different sources with the total value of goods in a particular industry.

Market Share Goals

Market share or market share is often associated with and used as a unique indication of market competitiveness, which seeks to show how well and how well it is performing with its competitors. This metric tool is also helpful in completing an assessment of changes in sales revenue which helps managers evaluate the key demands of their market.

Using this technique, they can evaluate various factors, including market changes, market trends, customers or competitors in the same company sector.

In general, sales increases resulting from primary demand are cheaper and more profitable for the firm than market gains from the same competitors.

On the other hand, a loss of market share will inevitably represent significant long-term problems that will require a change in the approach previously used.

Definition of Market Share and Its Purpose

A company whose market share is below average may not last long, because goods and patterns of market share are also early indications of potential or difficulties in the future.

Different studies have shown that market share may be an asset that is needed and desired by many competing companies. However, many experts argue that a company's economic strategy should not have objectives or fundamental criteria for market share.

The use of this Market share can only be used as a basis for measuring the performance of competing companies to help create and build a company system based on a careful evaluation of the impact of each policy on its competitor's Market share.

Measuring the Success of the Company's Market Share

As stated, Market share is one of the metrics companies can use to evaluate the company's performance in relation to their competitors.

For example, ABC has a target market share of 10% from the entire market in 2018. To reach the target market, ABC company needs Rp. 40 million advertising costs.

If ABC company subsequently obtains a market share above 10%, then the company's performance is considered very good. Conversely, when ABC only has a 9 percent market share, its marketing performance will be assessed as worse and will have problems with effectiveness and efficiency.

There are many reasons that prevent companies from achieving their market share, including market share that is too high, increased company competitors, decreased competitiveness and promotions that cannot reach the target market, or inappropriate target markets.

Market share type

To learn more about market share, you need to know what type of market share is appropriate for your company. Why? Because before and after analyzing product sales, each company will be able to obtain information relating to its market share.

This market share is based on two different types of market share, namely value and volume, which have their own measurement indicators.

The overall market share will be determined based on the total sales segmentation for the type of market share. It is understandable, in this case, that all data based on price achievement will be calculated by the company.

The entire Market share will be determined in terms of the type of Market share in value based on all sales sectors. Thus, the company can calculate all data based on pricing performance.

All data is based on sales data related to the number of units used based on the type of market share volume. This kind of market share will concentrate more on the total product currently offered in the market.

Usually the two types of market share above cannot be placed at the same linear point because the company has a greater value, but the volume of the market share is low.

How to Increase Market share

By understanding the importance of market share in a business, you will understand the company's strengths and weaknesses and be in a position to predict market needs.

You can evaluate the advantages and disadvantages of a company using the SWOT technique. Thus you can find out what is needed to increase the company's production.

However, you have to do something else to grow your company's market share or market share. The way you can try is:

  • Choose a new type of business with not much competition.
  • You have to think that you can manage a business successfully.
  • Determine the vision and business goals of the company
  • Analyze competitor strengths.
  • Monitor industry price movements and determine the most suitable price.
  • Build and build a wide market network to enable the company to develop.

Market Share Advantages and Disadvantages

The following are the advantages and disadvantages of market share.

Market share gain

As we discussed together, this market share is a tool for making strategies, therefore companies need to recognize the advantages of market share as an indicator of value.

The main benefit of market share is that it can be used as a comparison between two or more companies compete in the market and can also indicate the overall level of competition between all firms in the same industry.

Thus, market share or market share can then show the company's growth. When the company sees market share growth for several consecutive quarters, the company already understands the correct manufacturing methods and goods market in accordance with market needs.

Market share loss

As a tool for creating your own corporate image, Market share also has its drawbacks. Alone, the value of Market share would be worthless. Total revenue will offer little information about the company's earnings as a key element in determining market share.

If a company has the largest market share but has only a small advantage compared to other companies in the same industry, market share may be a less significant indication of the company's current and future success.

Market share can also show market information compared to companies because certain markets already dominate one or a group of companies that prevent other companies from competing in the industry.

The monopoly power they create almost makes it difficult for other small companies to dissolve, and analysis of Market share will further strengthen the notion that small companies can only make small profits.


The following are questions and answers regarding the discussion above.

How to Calculate Market Share

Typically, market share is calculated by dividing a company's sales during the period by the industry's total sales for the same period.

How to Find Market Share

You can determine a company's market share by dividing its total sales or revenue by the industry's total sales during the fiscal year. Use this metric to get an overview of company size relative to industry.

Why Market Share Is Important For A Business

In particular, when market share increases, companies tend to have higher profit margins, decreased buy-to-sell ratios, lower marketing costs as a percentage of sales, higher quality, and more expensive products.


The increase in sales resulting from primary demand is cheaper and more profitable for the company than the market advantage of the same competitors. Market share can be used as a comparison between two or more companies competing in the same market. It can also show the overall level of competition between all the companies in the industry.

Back to top button