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Ad Math: How to Calculate Market Share

In this week’s Ad Math video, we’re going to walk through how to calculate Market Share.

Why Market Share Matters

The main goal of marketing is to attract and retain customers by promoting why your product or service is better than your competitors. So, to measure if you’re successful in that goal, you need to assess your performance within your industry or category. That’s where market share comes in.

Your Market Share should factor into a lot of marketing planning, and it should be analyzed consistently throughout the year to better understand the various sources of performance.

How To Determine Your Market Share

Determining your market share is relatively easy assuming you know how many sales for your type of product or service has occurred within the industry in a given time. Let’s take a look at how to figure it out:

What Your Market Share May Tell You

A rising market share is typically a good sign however, you need to note whether the increase is because you may have dropped your price or if the category is changing and your competitors are leaving the market for some reason. In either case, knowing your market share helps you gauge your situation.

If this video helped, please consider subscribing to our YouTube channel where we’ll release a new Ad Math video each Wednesday. And if you have a marketing metric that you’d like us to break down in an upcoming video, let us know by adding it in the comments.

  • avatar
    VideoPortal Says:

    Market share is a key indicator of market competitiveness—that is, how well a firm is doing against its competitors. It enables managers to judge not only total market growth or decline but also trends in customers’ selections among competitors. Research has also shown that market share is a desired asset among competing firms. Experts, however, discourage making market share an objective and criterion upon which to base economic policies. The aforementioned usage of market share as a basis for gauging the performance of competing firms has fostered a system in which firms make decisions with regard to their operation with careful consideration of the impact of each decision on the market share of their competitors.

    • 03.28.17
    • 10:11 pm

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