relative share

(noun)

market share in relation to the market leaders.

Related Terms

Examples of relative share in the following topics:

  • Estimating the Addressable Market

    • Few organizations track market share even though it is an important metric.
    • Though absolute sales might grow in an expanding market, a firm's share of the market can decrease which would bode ill for future sales when the market starts to drop.
    • Where such market share is tracked, there may be a number of aspects that will be followed:
    • Including competition and distribution issues then frames the strategy within realistic boundaries and allows a company to gauge served market share (SAM), the percentage of the market that is already being served, either by that company or all providers.
    • The folio plot visualizes the relative market share of a portfolio of products versus the growth of their market.

  • Measuring Success

    • Market Share Analysis: Market share is an important metric to track.
    • Though absolute sales might grow in an expanding market, a firm's share of the market can decrease, which bodes ill for future sales when the market starts to drop.
    • Market share is tracked through parameters including overall market share, segment share, relative share, annual fluctuation rate of market share, and the specific market sharing of customers.

  • BCG Matrix

    • A scatter graph is used to show how a product/BU ranks according to market share and growth rates.
    • A cash cow is a product/BU that has high market share and is in a slow growing industry.
    • A dog has a low market share in a mature industry.
    • A star has a high market share in a high growing industry.
    • Other possible uses for the BCG Matrix are determining relative market share and the market growth rate of a product line.

  • Calculating Market Share

    • -- Revenue market share: Revenue market share differs from unit market share in that it reflects the prices at which goods are sold.
    • In fact, a relatively simple way to calculate relative price is to divide revenue market share by unit market share.
    • Market dominance is a measure of the strength of a brand, product, service, or firm, relative to competitive offerings.
    • The most direct is market share, discussed above.
    • The concentration ratio of an industry is used as an indicator of the relative size of leading firms in relation to the industry as a whole.

  • Competitor-Based Pricing

    • Sometimes such pricing can take the form of a firm setting a market share objective and discounting their price relative to their competitor until they attain it.
    • For example, if a firm sets a market share objective when the market size is fixed or declining, then this immediately signals that this gain in market share will come at the loss of a competitor.
    • Focusing on market share does not necessarily lead to maximum profits.
    • Instead of setting market share objectives, firms should focus on identifying the most profitable segments to serve, and finding ways of profitably serving them while protecting themselves from price wars.
    • Companies that employ competitor-based pricing can use computer programs such as this to analyze market share.

  • GE Approach

    • Different internal factors that need to be considered include assets and competencies, brand strength, market share, market share growth, and customer loyalty.
    • Other factors that should be considered include relative cost position, profit margins, innovation, quality, financial resources, and management strength.

  • The Diffusion of Innovation

    • The rate of adoption is the relative speed with which an innovation is adopted by members of a social system. "
    • With successive groups of consumers adopting the new technology (shown in blue), its market share (yellow) will eventually reach the saturation level.

  • New Product Pricing

    • In the introductory stage of a new product's life cycle means accepting a lower profit margin and to price relatively low.
    • Penetration pricing is the pricing technique of setting a relatively low initial entry price, often lower than the eventual market price, to attract new customers.
    • Penetration pricing is most commonly associated with a marketing objective of increasing market share or sales volume, rather than to make profit in the short term.
    • Early adopters generally have a relatively lower price-sensitivity and this can be attributed to their need for the product outweighing their need to economize, a greater understanding of the product's value, or simply having a higher disposable income.
    • To gain further market share, a seller must use other pricing tactics such as economy or penetration.

  • Competition

    • If competitors are defined too narrowly, there is a risk that an unidentified competitor will take market share away without the company's knowledge.
    • Once competitors are correctly identified, it is helpful to assess them relative to factors that drive competition: entry, bargaining power of buyers and suppliers, existing rivalries, and substitution possibilities.
    • These factors relate to a firm's marketing mix decisions and may be used to create a barrier to entry, increase brand awareness, or intensify a fight for market share.
    • Powerful buyers exist when they are few in number, there are low switching costs, or the product represents a significant share of the buyer's total costs.
    • For example, in slow-growth markets, competition is more severe for any possible gains in market share.

  • Maturity

    • During this stage, sales growth has started to slow down, and the product has already reached widespread acceptance in the market, in relative terms.
    • Competitors' products will begin to cut deeply into the company's market position and market share.
    • Brand differentiation and feature diversification is emphasized to maintain or increase market share