Quick Answer: Why Is Market Share Important To A Company?

How do you increase sales?

If you want to boost sales and don’t know how, here are 9 awesome ways to do just that:Focus on the existing customers.

Learn about competitors.

Innovation and unique products.

Cultivate value.

Build a customer service approach.

Customer relations.

Promotion.

Marketing.More items…•.

Why Market share is important for a business?

The significance of market share: Market share is a measure of the consumers’ preference for a product over other similar products. A higher market share usually means greater sales, lesser effort to sell more and a strong barrier to entry for other competitors.

What does market share depend on?

Market share represents the percentage of an industry, or a market’s total sales, that is earned by a particular company over a specified time period. Market share is calculated by taking the company’s sales over the period and dividing it by the total sales of the industry over the same period.

What does it mean to maintain market share?

Market share is the percent of sales a specific product attains in relation to the total sales of all similar products. … Holding or maintaining market share is a defensive strategy that seeks to protect the market that has already been conquered. Managers should defend their markets against competitor attacks.

How can a company increase market share?

5 Effective Ways to Increase Market Share OnlineBuild a referral program. It takes a lot of time and effort to acquire new customers, which is one reason why so many B2B businesses rely on referral programs. … Increase engagement with customers. … Stay ahead of your competitors. … Develop a unique brand position. … Market to niche audiences.

How do you maintain profitability?

Four ways to increase business profitability. There are four key areas that can help drive profitability. … Manage your costs. … Review your offer. … Buy more effectively. … Concentrate your sales efforts. … Expand your market. … Boost productivity. … Checklist: improving the profitability of your business.

How do you steal market share?

Following are some ideas to help you think in simpler terms when it comes to stealing market share and customers from your competitors:Focus on Low Hanging Fruit. … Find a Niche and Own It. … Be Flexible and Ready to React Quickly. … Be Social. … Know When to Go With Your Gut.

What are the benefits of increasing market share?

Increasing their market shares puts a company at a vantage point and ultimately increases its competitive advantage. Having a higher market share also postures a company to better prices from suppliers and increases their buying power.

What is a good percentage of market share?

Gaining market share is easy when your current share is relatively small. Increasing that share from 5% to 10% to 15% is relatively easy. You “merely” need to target the right customers (or segments), communicate a well focused value proposition, and service them well.

What is low market share?

Although there are numerous ways to define successful performance and low market share, we have chosen two straightforward definitions. Low market share is less than half the industry leader’s share, and successful companies are those whose five-year average return on equity surpasses the industry median.

How do you capture market share?

Five Ways Your Business Can Grab Market Share TodayStay relevant through innovation. One great way to gain market share is to spot new trends ahead of competitors. … Respond to customers — fast. … Use customers’ ideas. … Snap up competitors. … Be more flexible.