The total market share of the company. A company's market share - a tool or a myth? How can you collect information about a specific market?

15.03.2020

Company market share

How to calculate a company's market share in practice? This question is often asked by beginner marketers. However, even for marketing specialists who have been working in the company for more than one year and are familiar with the market, the issue of assessing the company's share often remains difficult.

Is it really absolutely necessary for a company to know its market share or is it just a myth that is maintained despite its irrelevance. Let's try to figure it out in relation to Russian marketing.

Market share refers to the position a company occupies in the market relative to its competitors. How strong is its market position.

Market share - a simple formula

The formula for calculating market share is, in general, simple. A company's market share is equal to the ratio of sales figures to the total sales of products in the same category in the market. At the same time, the market share can be determined both in physical terms (ie, in units of production) and in monetary terms.

where: D r- market share, %;
Q n- the volume of sales of the analyzed company in monetary (ruble) or natural (unit) terms;
Qtot is the total volume of sales in the market. It can also be expressed both in rubles and in units of production.

It would seem simple - we take the sales volume of our company, which are known absolutely exactly, and divide by the sales volume of all companies offering similar products in the market where the company operates. And here the marketer faces the most important problem of assessing market share - where to get data on sales of competitors? For some markets, this data is not a secret - take reports on the automakers market - for any year you can find data on car sales with an accuracy of one piece.

Or data on sales of products of individual brands in network retail - such figures can be found in the reports of large research companies.

A similar study can be ordered for your company. Only it will cost more than one hundred thousand rubles, and whether the company is worth paying for this particular information or the funds that may be required for this, you can find a better use.

For some markets (by far not all), research companies conduct initiative research, from which you can find out the production and sales volumes of the main players operating in the market. As an example, I can give an example of a study by RBC for the heat meters market.

Such marketing research, which are offered on the market, are much cheaper than exclusive research, and are quite suitable for a primary acquaintance with the market. Just do not expect from them an absolute coincidence with the real state of affairs. Even in the most "correct" study, there may be data that differ from reality.

But what should a marketer do if the company in which he works is not able to order such a study?

Just start performing the direct task of marketing - the collection and analysis of information. We will talk further about how to do this. Now let's remember why a company is so interested in the market share it occupies.

Company market share - background

Some authors, when describing the concept of market share, refer to the article "Market Share: A key to Profitability" by Professor Buzzell, published in 1975 in the Harvard Business Review. But in this article only statistically confirmed the impact of market share on company success. The market share strategy is most well-known after the development by the Boston Consulting Group (BCG) of its well-known strategic growth/market share matrix. But, if we proceed from the fact that marketing began with the economy, the history of the issue began much earlier.

Even in the first textbooks of economics (microeconomics), it was shown that a company's profit is determined by revenue (gross income) and production costs, variable and fixed. Accordingly, more successful (have greater profits) enterprises or those that can sell goods for more high prices compared to competitors, or have lower unit costs. At the same time, the total amount of profit, in a highly simplified form, is defined as the difference between revenue and total costs.

Now let's look at the classic formula.

profit = revenue - (variable + fixed costs).

If we expand it a bit, we get:

Profit = quantity x (price - variable costs) - fixed costs

In the extreme case, the monopolist can set any price without falling sales. Elasticity and switching to substitute goods, in this case, we leave out of the brackets. But even in the case of leadership, the market leader may have lower fixed costs due to the experience curve.

In general, everything is logical. But remember when the strategy focused on the market share of the company became popular and in which companies. 70s. Economic crisis, which particularly affected large companies USA. Accordingly, the main demand for consulting services was from diversified companies that needed to find criteria for optimizing their business. Indeed, up to this point, growing demand in the markets provided profit for most companies in the market, and with a slowdown in demand, the crisis was first felt by diversified companies with “dispersed” assets.

Is it worth adopting their experience without regard to the scale of the business?

Market share of the company - what to consider

Math doesn't lie. Other things being equal, the company with the largest market share has the advantage. But are the conditions always equal? What implicit conditions are taken into account when talking about the desire for market share growth?

– Growth in sales leads to reduction in unit costs.

This is more often true for variable costs. However, in general, costs are reduced only if fixed costs on the same level, which is far from reality. More often than not, an increase in a company's sales leads to a spike in fixed costs over time.

Things to Remember- the goal of increasing sales (with a given profitability) can be set provided that fixed costs remain at the same level. If this is not the case, a feasibility study is needed. Those. needs to be considered investment project and the goal is not to increase market share, but return on investment.

– Increasing market share allows for higher prices.

This condition is not always met. Moreover, in the pursuit of market share, price competition is often used, in the expectation that then prices can be raised. It is unlikely that it will be possible to raise prices - now is not the first half of the 20th century, when buyers often had no alternatives.

Things to Remember- If you are not already a price-targeting company, don't count on the possibility of raising prices in the near future. Those 1-2% of the market volume, which you may get, will not make you a monopolist.

– An increase in profits upon reaching the desired market share allows you to compensate for the costs that the company incurred at the stage of actively increasing its market share.

This does not always happen. Actually, all criticism of the strategy aimed at increasing market share is aimed at proving that increasing market share does not always lead to increased profits. Who would doubt that … .

Things to Remember- any planning involves setting quantitative goals and assessing the necessary investments. It is worth remembering that the main entrepreneurial activity not sales volume, but long-term profit.

It is precisely in order to assess whether it is worth aiming at a significant increase in sales - and what is it if not an increase in the company's market share - and an assessment of the company's position in the market is necessary. Of course, within the framework of the full scope of economic calculations.

How to estimate market size to calculate a company's market share

Now back to the question How can a marketer evaluate market share if accurate data on market size is not available?. First of all, I can advise, in the absence of a complete understanding of the market, for example, if you are just starting to work in this market, still do not save on buying a ready-made study, if it is available on the market. This is the best option to quickly get acquainted with the general situation in the market where the company operates.

If there is no such study or its purchase is impossible, it is worth looking for data in the reviews published by industry publications. Even the most general indicators will do. At the first stage, you just need to assess the significance of the company for the market. If the company's market share is estimated to be less than 5-10%, don't worry, you don't need exact data.

Read again the conditions that are necessary to target market share. It's just that with a market share of less than 20-30%, the company has practically no impact on the market. Accordingly, goal-setting with a focus on market share is inefficient. Focus on other metrics.

Here it is worth making a reservation. Estimating the size of the market is needed not only for setting goals. First of all, it is needed to assess the company's prospects in the market. After all, by evaluating the size of the market, you estimate the volume of potential demand and, consequently, the attractiveness of the market for the company. Remember at least the principles of segmentation. The segment must be measurable, must be large enough and last long enough for the investment to lead to a corresponding increase in sales. And, since the segment is only a part of the market, then all of the above applies to the market as well. The company must understand the size of the market in which it operates in order to set realistic goals. But here high accuracy is completely optional here. For small company it is enough to understand that its sales goals can be achieved in the market where it operates.

General market evaluation procedure could be as follows:

To begin with, we set the boundaries of the market.

We calculate the market volume by demand.

We estimate the number of consumers.
Estimates the average consumption per consumer.
We obtain an estimate of the market volume by consumption.

Even in the B2B market, getting this data is not so difficult.

To estimate demand, you can apply the formula:

Demand = Number of consumers × Average unit cost × Number of units consumed.

It is worth noting that in this form the formula can be applied to individual product groups in which individual products are comparable in price. Otherwise, you have to compare too different products on the market.

For a rough estimate of the market, you can use the calculation based on consumption rates. In this case, we can estimate the volume of the market in physical terms.

Demand \u003d Number of inhabitants × Consumption rate.

Often this method helps to assess the potential market when the company plans to enter another region. Data on per capita consumption are sometimes provided in analytical articles. In addition, this indicator can be calculated on the basis of available information for individual markets, which the firm knows quite well.

We calculate the market volume by supply

We create a list of manufacturers and importers
We group them by volume (usually 3-4 groups are enough)
We estimate the number of manufacturers and importers in each group.
For the representative of each group, we estimate the volume of the proposal
We get an estimate of the market size for the offer.

Production and import data can be used to estimate supply. Let's make a reservation right away that this makes sense if we are talking about a market for which you can estimate the volume of imports and exports. In this case, the formula is quite simple:

Supply = Production + Import - Export +/- Inventory.

Since it is almost impossible to estimate the volume of warehouse stocks, and in the conditions of consumer goods markets this factor does not play a role, this part of the formula can be neglected. It is advisable to use this method to assess the volume of the industry market on a national scale and to assess the dynamics in the market.

Evaluation by distribution channels.

If the goods are brought to the consumer through a chain of companies - sellers, then it is possible to estimate the volume of sales by distribution channels. After all, all products are sold to the end consumer through a network of outlets, the number of which can be estimated by also breaking them into categories.

We build the structure of sales channels
We estimate sales volumes for each of the participants in the distribution channel to end consumers.
We calculate the offer for each of the groups of producers.
We obtain an estimate of the market volume by distribution channels.

When understanding the situation, the values of the market volume obtained by each of the methods will be approximately the same. A spread of 10-20% can be considered quite good accuracy. If not, then you missed something. You will have to refine your understanding of the market.

This will help you with individual indicators that come across both in open sources and can be obtained from experts, which will be those who work in contact with buyers, that is, your sellers.

In essence, you are creating your market map, which you will gradually refine throughout the entire period of work in the company. After three to six months of active work with market information, an understanding of the general patterns of the market comes.

In practice, it takes about one year for a marketer to become a market expert. This is what we should strive for.

Application

Methods for estimating the size of the market

Method	Description	Advantages	Flaws
Analysis of secondary information	Includes an analysis of all documentation that may contain information about the market of interest to us and may be useful in marketing activities: statistical data, government data, market surveys, specialized magazines and articles, Internet data, etc.	One of the cheapest ways to estimate market capacity.More fast way compared to doing field research.	The fragmentation of the information received, the high generalization of the data and the lack of specificity, the method of obtaining the data is not always clear.
Studying the market from the standpoint of production and sales of products.	Includes a study of manufacturers, wholesalers and retail. With a small number - all enterprises in the industry, with a large number - a sample. The information obtained from this source makes it possible to determine not only the actual sales volumes, but also the representation of manufacturers and brands.	Compared to consumer research, faster and cheap way. Allows you to identify the opinion of sellers about the system of marketing activities of manufacturers.	Difficulty in collecting information. Frequent failures. The possibility of providing inaccurate, deliberately false information of sellers. It is not always possible to take into account unsold balances.
Costs and consumer behavior.	We study either the costs that consumers have made for the products of interest to us over a certain period of time, or the frequency of purchases and the volume of products purchased, together with the average retail selling price.	The breadth of information received. Possibility of defining social dem. and other characteristics of consumers, their motivations, assessments of manufacturers, sellers ...	Longer lead times. The difficulty of verifying the veracity of information received from consumers. High cost of obtaining information.
Calculation of capacity based on the consumption rates of a given type of product.	This approach is usually used for food products, raw materials and Supplies. The statistical basis for the calculations are the annual consumption rates per inhabitant and the total population. Thus, the final capacity figure is obtained by multiplying the consumption rate per inhabitant by the value of the total population.	Cheap and fast, ideal for a preliminary assessment of market capacity.	One of the most inaccurate calculation methods. It does not allow assessing the market capacity by assortment positions. Difficulties arise with the definition of consumption norms.

One of the main indicators used in assessing the competitiveness of companies is market share. This is a simple but objective indicator of the firm's performance. It may be that, at first glance, the company is developing just perfectly: profits are growing, the pace of sales is also increasing, becoming more and more recognizable. But if at the same time the market share is small, then the prospects for business development seem rather doubtful. Therefore, when analyzing the marketing work of a company, it is always necessary to track its market share, as well as the market shares of the closest and / or strongest competitors.

where: D r- market share, %;
Q n- the volume of sales (sales) of our or another analyzed company. It can be calculated both in physical terms (pieces) and in value terms (rubles);
Qtot is the total volume of sales in the market. It can also be expressed both in pieces and in rubles.

There are 3 shops in the city consumer electronics. For the year, store A's sales were 15 million rubles, in store B - 20 million rubles, and in store C - 25 million rubles Calculate the market share for store A:

Thus, the market share of store A is 25% .

Scope of market share indicator

Market share allows you to evaluate two extremely important things. Firstly, the dynamics of the market share over the years shows the success of the company's development over time. Secondly, calculation and comparison of the market share of a company and other firms offering similar products in a given region, shows the competitiveness of this company.

Peculiarities of the market share indicator

market share can be calculated based on:

cost indicators ( sales volumes in rub.);
natural indicators ( sales volumes in pcs.);
the number of clients.

market share can be calculated both relative to the total sales volumes for the market as a whole, and relative to the sales volume of the strongest competitor (competitors).

Galyautdinov R.R.

Market share characterizes the position of the company in the market relative to competitors. The quantitative indicator of market share is determined by the percentage ratio of sales volume indicators to the total sales volume of goods of the same category in the market.

Although market share is the most important indicator of a company's marketing performance, there is no universally accepted perfect method for measuring it. The company's share can be calculated both on the market as a whole and within a separate serviced segment. Segment served - part of the total market for which competitive fight. In a situation where the volume of sales in the market as a whole is unknown, the share is determined relative to:

regarding sales of a number of closest competitors;
relative to the market leader, leading competitor.

Market share can be determined in two ways:

in kind;
in value terms.

Market share in real terms (in unit terms) - the number of units of a product sold by a particular company as a percentage of total sales in the market, expressed in the same units.

Market share by piece = Piece sales (quantity)
sales (%) Volume of unit sales in the entire market (number)

This formula can, of course, be modified to output either unit sales or total market unit sales for the other two variables, as shown below:

Unit Sales = Unit Sales Market Share (%) * Unit Sales Total Market

Market share in value terms (in sales volumes). Market share by sales volume differs from unit market share in that it reflects the prices at which goods are sold. In fact, relatively in a simple way Relative price calculation is the division of the market share by sales volume by the market share by unit sales.

Market share by volume =Sales volume (rub)
sales (%) Total sales in the market

Market share through brand consumption intensity known as Parfitt and Collins technique (P&C methodology). For the calculation, data from panel surveys (i.e., studies conducted on a constant sample of consumers) are used. The following calculation formula is applied (in %):

Brand Market Share = Brand Penetration * Brand Reacquisition * Brand Consumption Rate.

brand penetration to the market is defined as the percentage of buyers of a given brand (who made a purchase at least once) of the total number of buyers who purchase goods to which this brand belongs in a certain period. Reacquisition of a brand characterizes the loyalty of consumers to this brand. It is defined as the percentage I of repeated purchases made by buyers for a certain period of those who have already purchased this brand at least once. brand consumption intensity is calculated as the ratio of the average amount of consumption of a given brand of repeat buyers to the average amount of consumption by all groups in this category of goods.

Attention!

VVS provides exclusively analytical services and does not advise on theoretical issues of the foundations of marketing(capacity calculation, pricing methods, etc.)

This article wears exclusively informational character!

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A marketing tool that has become traditional is the analysis of the company's market share. Thanks to the analysis, it is possible not only to assess the current or past activities of the company, but also to draw up perspective plan development. The data obtained as a result of the work of marketers will show where the company is in the market in relation to competitors.

The objectives of the analysis of the market share of the enterprise

Analysis of the market share of an enterprise as marketing tool are usually used to achieve the following goals:

to increase the effectiveness of the fight against competitors in the market;

to gain a competitive advantage.

It is worth noting that to establish the first goal, the market is divided into small segments. To achieve the goal, it is necessary to analyze each individual market segment, including the territory, product category, group. To establish competitive advantages, it is necessary to work with several segments combined into one whole (ie, aggregated). This approach will help to understand the competitive capabilities of the enterprise in the market.

The data on the volume of own sales will not show the whole state of affairs in the market, will not give a complete understanding of what is happening with the enterprise and with the brands. Sales volumes may increase, but relative to the state of affairs in a rapidly developing market, these indicators may turn out to be negligible for the enterprise, if not negative. And it may be the other way around: the sales volumes of the enterprise are declining, but the analysis shows that the fall in total the market is coming even faster. So the company is in a pretty good position.

A similar situation is observed when comparing the enterprise with its main competitors. To fully understand the state of affairs, you need to compare your performance with that of other companies in the market.

An analysis of the company's market share is carried out on the basis of a specific segment base, which is determined by selecting competing products according to certain characteristics. The underlying market may include a territory, product group or product category, sometimes segmentation may be more detailed.

Assumptions on which an analysis of an enterprise's market share can be based:

External factors can have the same effect on goods manufactured different companies, but related to the same underlying market. First of all, these are the products most demanded by the consumer, seasonality, and other external factors.

The expansion of the segment by introducing a new product is reflected in all participants in this market, after which there is a share redistribution of the market in relation to all products and manufacturers.

A similar effect is likely when a certain product is withdrawn from the underlying market.

To correctly calculate market share, you need to have certain data. Do not forget that it is quite difficult to collect detailed information on a specific market segment. Often, the solution to this problem involves working with many sources that can provide at least some useful information, it can be:

Federal Statistical Offices.

Manufacturers Association.

Trading networks carrying out retail sales.

Independent research.

analytical agencies.

To analyze the market share of an enterprise and give the most accurate assessment of the state of the market itself, you need to compare all the data at your disposal. This means that it is desirable to work with information taken from different sources, and not dwell on one of them.

How is the analysis of the market share of the enterprise

It is possible to obtain information showing the market share in quantitative terms by comparing the volume of sales and general data on sales volumes of products of this product group, calculating their percentage ratio.

Market share shows the effectiveness of the marketing service of the enterprise. Do not forget that today there is no methodology that can give the most accurate result, and which could be called universal and generally accepted in the world economy. An analysis of the market share of an enterprise can be carried out both in relation to the entire market, and to its part, a separate segment (that is, to that element in respect of which various market participants are actively competing).

If it is impossible to calculate data on sales volumes for a particular segment, the market share is determined by analyzing the following indicators:

Sales volumes of the closest competitors.

The main competitor or flagship of the market segment.

Today, an analysis of the market share of an enterprise can be carried out using several fairly effective ways. For example, the following:

In kind. The result is presented as a percentage: the number showing the number of units of goods sold by one particular enterprise is correlated with the sales volume in this market (the same units are calculated).

In value terms. The way in which the result reflects the cost of the goods sold.

According to the method of Parfitt and Collins. A technique that consists in analyzing the intensity of brand use. In this case, information is processed, obtained over a certain period of time as a result of working with individuals and companies (panel surveys). Data is collected regularly from real consumers of the product.

An analysis of the market share of an enterprise is carried out by calculations according to a formula in which all data are expressed as a percentage:

Brand Market Share = Brand Penetration * Brand Repeat Purchase * Brand Consumption Intensity

Brand penetration is the number of consumers (in%) who once purchased the product of this brand, out of all consumers of the product presented by the company.

Repurchase of a trademark is an indicator of "loyalty" to a particular brand. It is calculated as a percentage of multiple purchases of products of this brand to a certain time period.

Brand consumption intensity is the average ratio of purchases by repeat consumers to the average purchases of all product groups in that category.

As a result of combining the first two methods, a rather convenient and uncomplicated formula is obtained:

Qn is the volume of sales of a particular company;

Qtotal is the total volume of the market.

It is worth noting that the calculations can be done in two ways:

in rubles (i.e. in value terms of profit);

in kind.

As a rule, when analyzing the market share of an enterprise, they prefer the value expression of the indicator, because the price per commodity unit is not always known, and it can differ greatly from that offered by competitors. As a result of differences, data in kind can be very, very inaccurate.

Example of Enterprise Market Share Analysis

Consider an elementary example of the analysis of the market share of an enterprise:

There are 4 companies in the city of N that manufacture garments: Strizh (with a monthly sales volume of 70 thousand rubles), Chaika (with a volume of 80 thousand rubles), Lastochka (85 thousand rubles). ) and Oriole (65 thousand rubles). The management of the Strizh company decided to determine the market share owned by their company. What is needed for this?

First you need to establish the total market size. This can be done by adding up the sums of the sales volumes of all the companies represented on it (it turns out 300 thousand rubles). This is Qtotal (the denominator of the above formula). It remains just to do the calculations: 70000: 300000 x 100% = 23%

It turns out that the market share of the Strizh company is 23%. What does it mean? Just what all companies in the city have N approximately equal market shares. Any conclusions about the company's activities can be drawn only if there is data on the dynamics of the market share and changes in its volume.

What factors influence the results of the analysis of the market share of the enterprise

The change in the share depends on such indicators as:

Market segmentation. The essence of segmentation is the distribution of consumers into categories that prefer to buy one product. This indicator will allow the management to make the right decision about which product should be offered to the consumer, and which one is better not to exhibit at all. Market segmentation in some way affects the formation of the company's product portfolio (you can use the method-matrix of the Boston Advisory Group). The BCG model was the result research work specialists Boston Consulting Group in the fieldstrategic planning . The matrix is based on the representation of a kind of "life" cycle that goes through any product on the market. According to experts, the cycle consists of 4 stages: exit (product - "question"), growth (product - "leader"), maturity (product - "cash cow") and decline (product - "dog").

Competition is the most important factor. Even at the stage of preparation for work, it is necessary to carry out. It is likely that the analysis of the company's market share will show the inappropriateness of entering a particular market due to insufficient resources.

There is such a concept as perfect competition". It refers to a type of industry market in which a large number of companies offer a standardized product and none of them is able to influence the formation of its price due to insufficient control over market share. In the case of perfect competition, the share of each company on the market does not exceed 1%, which is the reason for the impossibility of influencing the formation of the market price by increasing sales. Thus, if a standardized product lacking individuality is sold on the market, the company is not able to influence the price set by the market. It must take it "for granted", as a price formed by the market itself (as opposed to monopolistic competition).

If perfect competition has formed on the market, then none of the companies represented on it can see a competitor as a threat to their market share, which means that it considers it pointless to be interested in the production solutions of competing firms and carry out. Information about prices and approximate profits can be obtained by any company, therefore, the possibility of taking emergency measures when market conditions change is not ruled out. This is done by investing in some factors of production after the sale of others. Sellers are absolutely free to enter and leave the market, because there are no barriers to work. However, as well as nothing prevents the termination of the company.

Imperfect competition may arise in the market if at least one of the above requirements is violated.

Staff motivation. First of all, this refers to the motivational level of sales managers. An analysis of the market share of an enterprise shows a direct dependence on the efficiency of salespeople (the better they work, the higher the share).

An example is financial incentives. Such motivation consists in setting a certain level of sales, set by the manufacturer in front of the stores, in order to aim for high sales rates. The program is implemented by holding competitions between points of sale (shops), and the indicators can be either relative or absolute. For example, a store that sold more goods (as a percentage) during a set period of time compared to previous indicators can win the competition. Or, for example, won the store that made more sales compared to other outlets (stores) for a certain period of time.

Motivation through material incentives is aimed at increasing market share, because thereby sales themselves are encouraged, as a way of influencing the end consumer of products.

Let's look at a few examples. A company operating in the food market motivated its staff in order to increase the retail space on the shelves at the time when new products so that the novelty is clearly visible to the buyer. Another company whose activities are related to the market household appliances, increased its income by almost 3 times after it carried out the motivation for the sales of washing machines in one of the largest retail chains. The conditions of the competition contained an indication of the reporting period during which the store had to sell the maximum amount of this product. If the sales figures reached the maximum mark in relation to the period that was set, then the winning store was given a material reward. Naturally, the sales results exceeded all expectations.

Strengthening positions in the international market. This indicator is quite controversial, but the management of reputable companies and corporations always pay special attention to it, making very large investments in advertising abroad. The thing is that companies that are popular on the world market are not classified according to nationality.

In order to analyze the market share of an enterprise, a large amount of information is required, which is not so easy to get. It is important to stock up on a database of information from trusted sources. Therefore, it is worth turning to professionals. The information and analytical company VVS is one of those that stood at the origins of the business of processing and adapting market statistics collected by federal agencies. The company has 19 years of experience in providing commodity market statistics as information for strategic decisions that reveal market demand. Main client categories: exporters, importers, manufacturers, participants commodity markets and B2B services business.

commercial vehicles and special equipment;

glass industry;

chemical and petrochemical industry;

Construction Materials;

medical equipment;

food industry;

production of animal feed;

electrical engineering and others.

Quality in our business is, first of all, the accuracy and completeness of information. When you make a decision based on data that is, to put it mildly, wrong, how much will your loss be worth? When making important strategic decisions, it is necessary to rely only on reliable statistical information. But how can you be sure that this information is correct? It can be checked! And we will give you such an opportunity.

Main competitive advantages of our company are:

Accuracy of data provision. The pre-selection of foreign trade deliveries, which are analyzed in the report, clearly coincides with the subject of the customer's request. Nothing extra and nothing missed. As a result, at the output we get accurate calculations of market indicators and market shares of participants.

Preparation of reports on a turnkey basis and the convenience of working with them. Information is quickly perceived, as tables and graphs are simple and understandable. Aggregated data on market participants are summarized in the ratings of participants, market shares are calculated. As a result, the time for studying information is reduced and it is possible to immediately proceed to making decisions that are “on the surface”.

The information basis for calculating the market share of a product of a certain brand (for simplicity, the market share of a certain brand) is the sales volume of competing products. Thus, market share is a calculated indicator, except when it is determined by an expert method by asking experts direct questions about their opinion on the value of this indicator for individual products.

Typically, the sales volume for calculating the market share indicator is expressed in monetary units. However, to exclude the influence of prices on this indicator, it is possible, where appropriate, to use natural indicators, for example, the number of cars sold of certain brands.

To determine the market share of a product of a certain brand (a certain assortment position of a product group), both primary and secondary data should be used. Primary data is collected and processed using the following main methods.

1. Trade audit– determination of the share of sales of various products based on sales data of a representative sample of points of sale - wholesale and retail outlets.

Obviously, various outlets can be classified according to their location, type, sales volume, etc. The sample should represent different types of outlets. To form a sample, it is necessary to have a complete database of outlets. Only in this case, it becomes possible to project the obtained data on the entire studied market (market segment). Data is collected on the volume of sales of the studied products of competing companies.

Trade audit is typically performed by large research agencies with extensive data collection and analysis resources and mature research technology. Such studies cost tens and even hundreds of thousands of dollars, so they can be afforded mainly by large companies, most often global manufacturers of food and consumer goods.

Trade audit is carried out in the following sequence.

First, a complete census (sensus) is performed. trading network the area under study. The census includes any retail outlets that have the studied goods in stock, ready for sale. As a result of the sensation, we obtain a complete description of the general population under study - the number of outlets, their classification and distribution.

Further, a sample is made from the entire trading network, a so-called statistical panel is formed. Panel - these are the outlets where sales of the product under study will be recorded. The panel is divided into sub-samples, consisting of different types of outlets. You should first agree with the management of outlets about the possibility of the presence of an auditor and the collection of information. The auditor works directly at the point of sale and keeps a description of all goods of the category under study, located both in trading floor as well as in stock. The audit is carried out cyclically. Each audit cycle reflects sales over a specific period of time.

All collected data is entered into databases. For each brand of product and for different product groups, sales volumes and market share indicators are calculated.

Let be the total sales volumes for each competing product (A, B, C, ..., N) of a certain category in the studied outlets, included in the sample, presented in monetary units for the selected period of time, and - the total sales of "our" product. Then the market share of product A for a sample of outlets - PDA is calculated as follows:

(6)

Similarly, the market shares of all the products studied in our example are calculated:

It's obvious that .

It is possible to cover not all competing products of the studied category, but only the products of the main competitors. In this case, the calculation of the market share indicator is carried out only for the main competitors. Let the market share of "our" product and two products of the main competitors be investigated. Then

This indicator does not give a picture as a whole for the market (the figure of 100% refers only to the studied products, and not to the totality of competing products presented in retail outlets).

The sales volume for a sample of retail stores can be determined based on a regular Nielsen trading panel that provides a view of all retailers in a particular industry. Based on measurements on the trading panel, the Nielsen index is calculated, which determines the volume of sales by product, brand for a certain period of time (usually two months). The Nielsen index characterizes the average sales volume in one sample store for a certain period of time:

(8)

where V- sales volume for the selected period of time; - stocks at the beginning of the period; P - deliveries; B - return; - inventory at the end of the period.

The market share indicator is calculated using the above formulas.

Market share can also be determined using indicators such as numerical weighted distribution, selection indicator, average share in turnover.

Numerical distribution(PR) is the ratio of the number of retail stores that carry a given brand of product to the total number of a particular type of store where a consumer typically buys that type of product, expressed as a percentage.

PR = number of brand retailers Product X / total number of product retailers X (%).

Weighted Distribution(BP) is the market share of products held by retailers with Y brand of this product.

VR = total product sales X retailers who sell the brand Y/total product sales X (%).

A weighted distribution takes into account the size of stores that carry a particular product. For example, a weighted distribution of 60% of brand Y product X means that the Y brand is represented in stores that provide a total of 60% of the product's sales volume x.

Selection indicator(IV) = VR / PR = average product sales X in stores selling the Y brand / average sales of products for all retailers. A VR of 60% and a PR of 20% mean above-average sized stores are selected (they are few, but they produce the bulk of the product's sales). The selection indicator in this case is greater than one, namely 60/20 = 3.

Average share in turnover(DM) shows what position a particular brand occupies in selected stores, and can be considered as the market share of brand Y in the total turnover of product X in selected stores.

SD = brand turnover Y product X in selected stores / total turnover of products in selected stores (%).

Then the market share (SR) is defined as MR = PR IV SD = VR SD.

2. Diary consumer panel of regular respondents.

Respondents use a diary (records + checks and receipts) to record all purchases of the product group under study. The data obtained on the basis of the above calculated dependencies are translated by the researcher into market shares. Diary entries are used by many companies in different countries. As a rule, such panels are balanced in terms of family size, age of the head of the family, family income and geography. Panel members are selected quarterly and added to the active roster after receiving a report from them that meets the standards of the research company. For participation in the panel, its participants are stimulated. A family may be excluded from the panel upon application or simply by failing to send three reports in a row. In Russia, this method is beginning to be mastered by some large marketing companies in Moscow, but in the regions it is still very rare.

3. The scanner-panel is similar to the previous method, except for the method of fixing purchases.

In this case, the respondents are given an identification card (or the respondent's credit card is used). A person presents (uses) a card when paying for purchases in a store that has a barcode scanner. The respondent code is appended to the data read by the scanner. Unlike the first method, the scanner-panel allows you to evaluate sales within various segments of the consumer market. But this method is applicable only in countries with a very high degree of trade automation - it is necessary that almost all purchases be made in stores equipped with scanners.

4. Based on panel surveys, primarily for consumer products (both frequent consumption, such as food, and durable products, such as televisions), the market share of products of a certain brand can be calculated using the Parfitt-Collins method using the formula

where DR is the market share of the brand; PR - brand penetration, characterized by the percentage of buyers of this brand from the total number of buyers who purchase products of the category to which this brand belongs at least once during a certain period of time; PP - re-acquisition (substitution) of the brand, determined by the percentage of buyers who make

repeated purchases of a product of this brand. This is the percentage of consumers who have become adherents of this brand; I – intensity of brand consumption – the ratio of the volume of consumption of this brand by repeat buyers (brand adherents) to the average level of consumption of this category of products.

When applying this method, all products are divided into two categories - durable goods (demand is calculated per household) and non-durable goods (demand is calculated per consumer). Brand penetration for both groups characterizes the group of consumers who purchased the product for the first time. Repurchase, which characterizes secondary demand, for non-durable goods means that the consumer continues to buy the product of this brand, i.e. remains a fan of hers. For durable goods, secondary demand refers to a return to a given brand of product when a product is replaced or when an additional purchase is made. This method directly related to consumer research (bottom-up approach).

Suppose there are 10 buyers and competing products in the market X, Y, Z(Table 3.2).

Table 3.2. Market share calculation

Buyers	Penetration	Reacquisition
		XXXX
		XXXX

Brand penetration value X accounts for 40%, reacquisition 66% (8:12). The consumption intensity of the brand is calculated as I = 3: 1.8 = 1.67, where the number 3 characterizes the ratio of the amount of the product X(the sum of initial and repeated purchases) to the number of buyers who bought this product (12: 4 = 3). The number 1.8, which characterizes the average level of consumption of this category of products, is calculated in a similar way for all buyers of all studied products (18:10 = 1.8).

Market share is calculated using formula (1) as DR = 0.4 0.66 1.67 = 44% (check: DR = 8/18, column "Reacquisition").

5. Survey of consumers (physical and legal entities) is carried out at the place of residence of the respondent, in in public places, in the workplace, or in any other setting that involves personal contact.

Respondents are directly asked what products and how often and in what quantity they buy.

To determine the market share of consumer products of daily demand, the following structure of the questionnaire can be proposed (Table 3.3).

Table 3.3. Questionnaire structure

The product of these answers to three questions (O P Q) by the number of buyers of each product - P characterizes the sales volume of competing products for the study period.

For fast expendable products purchased systematically, for which there are certain consumption rates (for example, 2 g of toothpaste for one brushing), it is sufficient to determine consumer loyalty to a certain brand and the frequency of toothbrushing based on a survey.

The same applies to calculating the sales volume of category products. B2B, having consumption standards, for example, consumables, tools, etc.

6. When the number of analyzed products is relatively large (more than 7–10), the method of paired comparisons is used (this method is discussed in the works). To conduct a market share analysis based on paired comparisons, you need to:
1) make all possible pairs of the studied products and prepare questionnaires for pairwise comparisons;
2) using these questionnaires to conduct a survey of consumers (representatives of the consumer or business market, depending on the object of study). Respondents are asked to compare in pairs with each other products of the same type supplied to the market under study. At the same time, the questionnaire questions can be formulated, for example, as follows: "If you had to choose product A or product B when buying, which one would you prefer?" Possible answers: "Product A", "Product B", "Products are equivalent";
3) based on the data obtained, evaluate the market shares of products of competing companies.

Assuming that steps 1) and 2) have already been completed, we will show how, based on the results of pairwise comparisons, we can estimate the market share of each competing product.

Let's consider a hypothetical example. Let the respondents express their attitude to five competing brands A, B, C, D, E (Table 3.4).

Table 3.4. Determination of market share based on pairwise comparisons

The numbers at the intersection of, for example, the first row A and the second column B (0.61) represent the proportion of cases where brand A is preferred over brand B. Obviously, at the intersection of the second row and the first column there should be a number that complements the previous share to one (0.39). If the respondent finds it difficult to choose the preferred trade mark, then the numbers 0.5 are entered into the table.

It is easy to check that the sum of all preferences in the example is equal to 10, the number of pairs being evaluated. Dividing the total preferences of each brand by the sum of all preferences characterizes the calculated value of the market share indicator for products of a particular brand.

7. Determination of market share indicators based on expert assessments.

It is carried out by direct processing and analysis of expert judgments, which can be employees of marketing departments of organizations, retail stores, as well as employees of consulting firms, marketing centers, marketing specialists, etc. involved from outside.

In addition to primary data, in the case when the market share is studied for enlarged assortment positions, and the market gravitates towards an oligopolistic structure (oil, gas, metals, mineral fertilizers, etc.), which is typical for products B2B, it is possible to use secondary data obtained from Russian and international statistical collections.

8. Use of marketing intelligence data, which can be carried out in various directions.

Having data on labor productivity in the industry and the number of workers employed in the production of major competitors, and assuming that all output is sold, it is possible to estimate the production volumes of competitors by multiplying labor productivity by the number of workers.

Knowing the costs of any type of resources (raw materials, electricity, gas, etc.) for the production of a unit of output and the volume of purchases of resources by competitors, it is possible to estimate the production volumes of competitors by dividing the volume of resources by the cost of resources for the production of a unit of output.

Knowing the average waste output per unit of production and the volumes of industrial waste of competitors, it is possible to calculate the volume of production of competitors by dividing the volume of industrial waste by the waste output per unit of product.

In the case of an industrial market, where there are few sellers, few buyers, and each purchase is expensive, the size of the market can be calculated by directly adding up the data on projects announced by competitors. Enterprises operating in such markets, as a rule, publish information about their projects in the press and on the Internet (since there are few projects, they tend to talk about each, at least on their own website). Thus, by monitoring the press, competitive and thematic Internet sites, you can collect very exact information on all projects in this industry for the reporting period.

Often, a company has access to specific data, which can be used to accurately determine the size of the market. For example, all POS terminals must be affixed with a special stamp at the time of sale, certifying that this type of POS terminal is approved for operation by the Federal Tax Service of the Russian Federation. It is also known that the right to manufacture and sell such stamps belongs to only one organization. If you can get information from this organization about how many stamps were sold in a year, then by multiplying the number of stamps by the average cost of a cash terminal, you can get the market size and your share in it (according to your own sales).

When using publicly available data, one must keep in mind that they can be very inaccurate. Majority Russian companies does not provide accurate information about the volume of products produced or sold and will try to circumvent existing regulations (whether it concerns customs, accounting or something else).

Obviously, the use various methods definitions of market share will give different results. In this case, it is necessary either to give preference to the most reliable method, or to use the average value of the market share indicator.