Prep Your Marketing Plan: Market Share

PREP YOUR MARKETING PLAN

So you're writing a marketing plan? Be ready to research the market share of each main competitor.

Why? First, this forces you to identify the key competitors and newly-emerging rivals, revealing some underlying competitive dynamics of the marketing environment. Second, market-share changes over time serve as metrics for measuring how your marketing strategy is affecting your product or brand's progress toward goals such as higher market share.

The formula for calculating market share is:

One firm's product or brand sales in a given market (units or dollars)

Overall industry sales of that product in that market (units or dollars) 

So if Marketer A sells 1 million widgets across America, and the entire industry's widget sales in America totals 20 million, Marketer A's market share is calculated this way:

1,000,000  ÷ 20,000,000 = .05 or 5% market share

Market share is often calculated month by month for competitive industries such as cars and trucks. Here, for instance, is Edmund's August market-share calculation for the US market for autos, broken out by manufacturer. This is only for the month of August, 2015. The numbers will look different in September, and again in October, and so on, as manufacturers implement and tweak their marketing plans for products and categories.

High-tech marketers are also intensely interested in market share. Microsoft, for instance, has most certainly set a goal of achieving a certain market share for its Windows 10 operating system. One month after launch, the brand has begun to achieve gains in market share, as measured in several ways. Interestingly, even outsiders are comparing the Win 10 market-share gains over time with previous Windows releases, to gauge trends in consumer acceptance.