Market Share Terms

What Is Market Share?

Market share is the percent of total sales in an industry generated by a particular company. 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. This metric is used to give a general idea of the size of a company in relation to its market and its competitors.

Total addressable market, or TAM, is the total market demand for a product in a year.

It is used to indicate how much potential a business has in a market.

Before calculating TAM, a company should consider its ability to reach its target market.

target market

A target market refers to a group of consumers that a product or service is aimed at.

These customers can be identified by income level, age, gender, or location.

By defining a target market, companies can make their marketing campaigns more focused.

unit sales

Unit sales refers to the number of products a company sells over a period of time.

For example, if a company sold 5 million mobile phones in a year, then it sold 5 million units.

Unit sales analysis can be used to calculate a company's average product price.

key players

Companies with a large market share are known as key players.

They have a dominant position in the market.

Without competitive products and services, new companies may struggle to compete with key players.

However, by analyzing key players' strengths and weaknesses, companies can find their own niche in a market.

market growth rate

Market growth rate refers to the percentage increase in sales in a market over a period of time.

Keeping track of the market growth rate allows a company to compare its performance with competitors'.

For example, if a company's sales have grown less than market sales, it has lost market share.

Questions

How may a target market be identified?

>by income level, age or gender.

If a computer company sold 5 million computers in a year, ...

>it sold 5 million units.

Bydefining a target market, companies can make their marketing campaigns moreappealing and effective.

Comparing unit sales regularly can help determine if the company is moving in a positive direction.

Before calculating TAM, a company should consider its ability to reach its target market.

Total addressable market is used to indicate how much potential a business has in a market

Unit sales analysis can be used to calculate a company's average product price.

By analyzing key players' strengths and weaknesses, companies....

>can find their own niche in a market.

If a market has grown faster than a company's sales,...

>the company has lost market share.

New companies cannot compete directly with key player unless their products are innovative.

Market growth rate refers to the percentage increase in sales in a market over a specific period of time.

In order to compete with key players, companies need to find their own niche in the market.

If a new companies can compete successfully, they are likely to become key players within a market.