Market share is a measure of a business’s success and position in the market. Grasping market share means that businesses are occupying a significant portion of the industry’s overall “pie”, leading the market and creating a huge competitive advantage. Let’s find out information about what Market share is? as well as tips to help increase Market Share for your business.

What is market share?

Market share is the percentage of sales or product output that a business accounts for in a specific market. In other words, market share shows how much of the overall “piece of cake” a business is occupying in the market.

Market share is usually calculated based on the total revenue or total output of the entire market and the revenue or output of the business.

For example: Business A sells 100 products in a market with total sales of 1,000 products. The market share of business A is 10%; Business B has a revenue of 10 billion VND in a market with a total revenue of 100 billion VND. The market share of business B is 10%.

Market share formula: Market share = (Business sales or output / Total market sales or output) x 100%

What benefits does market share assessment bring to businesses?

Evaluating market share brings many benefits to businesses such as:

• Assessing market share helps businesses determine their competitive position. Businesses can compare their market share with competitors to know where they are in the market, whether they are leading, following or lagging behind. From there, businesses can come up with appropriate strategies to strengthen their competitive position and increase market share.
• Helps businesses evaluate the development potential of the market, predict market trends and make appropriate investment decisions.
• Market share helps businesses measure the effectiveness of marketing, sales and product development strategies. Businesses can track market share over time to evaluate business performance and adjust strategy when necessary.
• Businesses can use market share as a competitive advantage when approaching investors and mobilizing capital for development.
• Thanks to Market Share assessment, businesses can also optimize production, distribution, sales, and marketing processes based on market share data.

Factors affecting market share

Market share is an important indicator to evaluate a business’s position in the market, competitiveness and development potential. There are many factors that affect Market Share, including:

• Products/services: Quality, price, product/service diversification directly affect attracting customers and increasing market share.
• Marketing and sales: Effective marketing strategies, professional sales team, promotions to attract customers, help businesses increase revenue and market share.
• Customers: Understanding customers’ needs, preferences, and loyalty levels helps businesses provide appropriate products/services and maintain market share.
• External factors: The economy, government policies, competitive environment affect business operations and market share of enterprises.
• Businesses need to regularly evaluate these factors to come up with appropriate strategies to increase market share and maintain their competitive position.
• In addition, brand, reputation, corporate culture, distribution system, sales, innovation and creativity also affect Market Share. Businesses need to consider all of these factors to build effective strategies to achieve business goals.

5 basic tips to help increase market share for businesses

In today’s fiercely competitive business world, increasing market share is one of the top goals of every business. Below are 5 basic tips that every business can apply to expand their market share:

Improve product or service quality

This is a key factor to attract and retain customers. Businesses need to focus on improving their products or services, ensuring the quality is always better than their competitors.

Offer competitive prices

Price is an important factor affecting customers’ purchasing decisions. Businesses need to research the market and set appropriate prices to compete with competitors but still ensure profits for the business.

Enhance marketing activities

Strengthening marketing activities is one of the secrets to increasing market share for businesses. Businesses need to promote their products or services to potential customers through effective communication channels such as advertising, email marketing, social networks…

Improve customer service

Good customer service helps retain customers and attract new customers. Businesses need to focus on building a team of professional, enthusiastic and ready to support customers anytime, anywhere.

Expand target market

Businesses can expand their target market to reach more customers. For example, businesses can expand into new markets, or target new customer segments.

By applying the above tips, your business can not only expand its market share but also improve brand recognition and strengthen customer relationships. These are important factors that help businesses develop sustainably in the long term. Don’t forget that every business has its own characteristics, so flexibly apply these tips to best suit the specific circumstances of your business.