A company's market share - a tool or a myth? Market share is a marketing metric: evaluation and analysis. Market segmentation Market share ranked first in the market

Michael R. Lewis is a former corporate executive, entrepreneur and investment advisor based in Texas. He has worked in business and finance for over 40 years.

The number of sources used in this article:. You will find a list of them at the bottom of the page.

Analysts have created dozens of ways to assess the performance of a company (and new ways are constantly emerging), so very often experts forget about some of the traditional tools for assessing company performance. Market share is one of such indicators and, knowing the methods of its calculation, you can determine the efficiency of the company and predict its prospects.

Steps

Part 1

Determine the period for which you plan to calculate your market share. To correctly calculate market share, it is necessary to consider certain values ​​for a specific period of time, for example, for a quarter, a year, or several years.

Calculate the total revenue (revenue) of the company. This can be done based on data from the quarterly or annual financial statements of a public company. Such statements include information about the total income of the company, as well as a breakdown of income by specific goods and services sold by the company.

• If the company you are analyzing has a wide range of goods and services sold, do not look at the total income of the company, but find its breakdown by specific goods and services.

1. Find the total sales for the market in question. These are the total sales in the market under consideration.

   Divide the total revenue of the analyzed company by the total market sales to find the market share of that company. For example, if a firm's revenue from the sale of a particular product was $ 1 million, and the total market sales were $ 15 million, then that company's market share would be 1,000,000 / 15,000,000.

   Define the parameters of the market. Companies are looking to expand their market share in line with their strategy. In our example, BMW knows that not every car buyer is one of its potential customers. BMW makes cars from the high-end segment, so less than 10% of car buyers are its customers (luxury car sales represent a small share of the total 12.7 million cars sold per year). BMW sold 247,907 vehicles in 2011, more than any other luxury car manufacturer.

   • Be clear about the specific market segment that you intend to research. This can be a general market, so focus on total sales, or a specific market segment limited to specific products and services (in this case, compare the values ​​for a specific product / service for each company in the market).

2. Determine the annual change in the market share of the analyzed company. Moreover, you can compare the changes in market shares of all competing companies. If the market share is growing, then the company's market strategy is very effective. For example, BMW's market share and number of vehicles sold increased in 2011 (compared to 2010). This means that the marketing and pricing strategies of this company were more effective than those of competitors (Lexus, Mercedes, Acura).

Part 3

Understand what information market share can provide. Market share is not the value that will give you comprehensive information about the analyzed company. This quantity has advantages and disadvantages.

Remember the limitations. As noted above, market share has its drawbacks.

1. Think about how market share affects your investment strategy.

   • You should not invest in companies that have not increased market share for several years in a row.
   • Investors are encouraged to look at firms with growing market shares. If such companies are well managed and profitable (as can be seen from the financial statements of the companies), then the value of such companies is likely to rise.
   • A firm with a declining market share may not be doing well. But this is not the only factor that needs to be considered in order to determine whether it is worth investing in such a company. Also look at profit margins and product mix (expanding or not).

Market share of the company

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

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

Market share tells about the position of the company in the market relative to competitors. How strong its market position is.

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 volume indicators to the total sales volume of goods of the same category in the market. At the same time, the market share can be determined both in physical terms (i.e. in units of products) and in monetary terms.

where: Dr- market share, %;
Q n- the volume of sales of the analyzed company in monetary (rubles) or natural (units) terms;
Q total- total sales in the market. It can also be expressed both in rubles and in units of products.

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

Or data on sales of products of certain brands in retail chains - 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 it is worth the company to pay for this information or the funds that may be required for this, you can find a better use.

For some markets (by no means all), research companies conduct proactive research, from which it is possible to 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 meter market.

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

But what should a marketer do if the company he works for does not have the opportunity to order such a study?

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

Market share of the company - background

Several authors refer to the 1975 Harvard Business Review article "Market Share: A Key to Profitability" by Professor Buzzel when describing the concept of market share. But this article is only statistically confirmed the influence of market share on the success of the company... The most well-known strategy for market share came from 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 economics, 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 by variables and constants. Accordingly, enterprises are more successful (have higher profits) or those that can sell goods at higher prices in comparison with competitors, or have lower costs per unit of production. 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 take a look at the classic formula.

profit = revenue - (variable + fixed costs).

If we expand it a little, we get:

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

In the extreme case, the monopolist can set any prices without falling sales. Elasticity and switching to substitute goods, in this case, will be left outside the brackets. But even in the case of leadership, the market leader can have lower fixed costs at the expense of the experience curve.

In general, everything is logical. But remember when the strategy focused on the company's market share became popular and in which companies. 70s. The economic crisis, which especially affected large US companies. Accordingly, the main demand for consultant services was from diversified companies, which needed to find criteria for optimizing their business. Indeed, up to this point, the growing demand in the markets provided profit for most companies in the market, and with the slowdown in demand, the crisis was primarily felt by diversified companies with "dispersed" assets.

Is it worth it, regardless of the scale of the business, to adopt their experience.

Market share of the company - what to consider

Mathematics doesn't lie. All other things being equal, a company with a large market share has an advantage. But are the conditions always equal? What implicit conditions are taken into account when talking about the desire to increase market share?

– Increased sales lead to lower unit costs.

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

Things to remember- the goal to increase sales (at a given profitability) can be set provided that fixed costs are maintained at the same level. If this is not the case, a feasibility study is needed. Those. it is already necessary to consider an investment project and the goal is not to increase the market share, but to 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, with the expectation that then prices can be raised. It is unlikely that it will be possible to raise prices - this is not the first half of the 20th century, when buyers often did not have alternatives.

Things to remember- If you are not already a company whose prices are guided by competitors, do not count on the opportunity to raise prices in the near future. The 1-2% of the market volume that you may receive will not make you a monopolist.

- The increase in profits when the desired market share is achieved allows to compensate for the costs that the company incurred at the stage of actively increasing its market share.

This does not always happen. In fact, 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 implies the setting of quantitative goals and an assessment of the required investments. It is worth remembering that the main thing in entrepreneurial activity not sales, but long-term profit.

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

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

Now back to the question, how a marketer can estimate market share if accurate market size data 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, you still should not save on buying a ready-made study if it is available on the market. it the best way to quickly get to know the general market situation in which the company operates.

If such research is not available or is not possible to buy, it is worth looking for data in reviews published by industry publications. Even the most general indicators... At the first stage, you just need to assess the importance of the company to the market. If the estimated market share of a company does not exceed 5-10%, do not worry, you do not need accurate data.

Read again the conditions you need to target market share. It's just that with a market share of less than 20-30%, the company has practically no influence on the market. Accordingly, targeting with a focus on market share is ineffective. Focus on other indicators.

It is worth making a reservation here. Market size assessment 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 assessing the size of the market, you are assessing 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, large enough, and last long enough for the investment to generate a corresponding increase in sales. And since a segment is only a part of the market, then all of the above applies to the market. A company needs to understand the size of the market in which it operates in order to set realistic goals. But high accuracy is completely optional here. For a small company, it is enough to understand that its sales goals can be achieved in the market in which it operates.

General market assessment procedure could be as follows:

First, we set the boundaries of the market.

1. We calculate the volume of the market according to demand.

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

Even in the B2B marketplace, getting this data isn't all that 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 market volume in physical terms.

Demand = Number of inhabitants × Consumption rate.

Often this method helps to assess the potential market when the company plans to enter another region. Per capita consumption data are sometimes reported 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.

1. We calculate the volume of the market 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 a representative of each group, we estimate the volume of the proposal
• We get an estimate of the market volume by supply.

To assess the proposal, you can use data on production and imports of products. Let's make a reservation right away that this makes sense when it comes to 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 +/– Stocks.

Since the volume of stocks is almost impossible to estimate, and this factor does not play a role in the conditions of consumer markets, 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 of the market.

Evaluation by distribution channels.

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

• We build the structure of sales channels
• We estimate the sales volumes for each of the participants in the distribution channel to end consumers.
• We calculate the offer for each of the groups of manufacturers.
• We get an estimate of the market size by distribution channels.

Understanding the situation, the market volume values ​​obtained by each of the methods will be approximately the same. A spread of 10-20% can be considered quite good accuracy. If not, you have not taken into account something. We'll 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, who will be those who work in contact with buyers, that is, your sellers.

Basically, you create your market map, which you will gradually refine throughout your entire tenure at the company. After three to six months of active work with market information, an understanding of the general laws of the market comes.

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

Application

Market size estimation methods

marketing coordinator
Department of Electrical
and telecommunication systems,
ZM Russia, Moscow

Determining the volume and market share is one of the main tasks of a marketer.

At the same time, three components of this task can be distinguished:

Market volume is usually understood as the total cost of all goods in a given group sold to consumers of the market under study for a certain period of time.

Market share is the percentage accounted for by a product with a specific brand name. On the basis of regular measurement of market share, it is possible to assess how the company's market positions are changing, how effective its marketing efforts are.

Market potential represents the maximum market size with the highest marketing activity of all companies in that industry sector of the market, given the state of the surrounding marketing environment. This is a theoretically calculated value that is never actually reached.

Market potential plays an important role in comparing it to the current market size. On the basis of this comparison, there is clarity about the possible expansion of the market. And these opportunities are one of the main indicators of the attractiveness of the market when making decisions on entering this market.

Methods for determining market size may differ depending on:

Before determining the size of the market, you need to clearly understand what exactly we mean by this market - to outline the boundaries. This includes clarifying the following parameters:

It can be one city, a specific region or several regions, the whole of Russia, etc. Moreover, if the market is heterogeneous and is divided into segments, the market size must be determined for each segment separately. The resulting indicators are then summed up.

For example, if we are researching the coffee market, then we need to clarify which types of coffee we are considering - instant coffee, ground coffee, coffee beans, coffee drinks, etc.

This article will show the methods for assessing market size that are most often used by Russian companies.

Methods for determining the size of the market can be divided into statistical, indirect and direct accounting methods.

Statistical methods for determining market size based on primary data

To measure the volume of the consumer market, statistical methods are used based on:
1) audit of retail;
2) a survey of consumers based on a statistical sample.

Retail audit Is a measurement of the flow of goods from producer to consumer through a retail network. The method is based on the assumption that the entire volume of the consumed product was purchased in stores, therefore, by fixing and summing up the number of sales of all stores (as well as markets, kiosks and other types of outlets), we will get the market volume of this product.

A retail audit allows you to determine:

Retail auditing is the responsibility of large research agencies with extensive data collection and analysis resources and proven research technology. The most popular agencies in Russia AC Nielsen, MEMRB,"Business analytics". Such studies cost tens and even hundreds of thousands of dollars, so large companies, most often global manufacturers of food and consumer goods, can afford them.

A retail audit is as follows:

1. The agency carries out a complete census (sensus) of the trading network of the study area.

The census includes any retail outlets that have the studied goods in stock and are ready for sale. The census usually takes into account the specific features of each outlet: its type, location, sales area, assortment, number cash registers, the number of sales personnel, etc.

To take into account the dynamics of the trading network, the sensus data is constantly updated.

As a result of the sensus, we get a complete description of the investigated the general population- the number of outlets, their classification and distribution.

The panel is the stores in which the sales of the investigated product will be recorded. The agency preliminarily agrees with them about the possibility of the presence of its auditors and the collection of information.

The panel retains all the properties of the general population and is compiled taking into account the proportional importance of individual trading channels or regions for the entire market. The panel is divided into sub-samples, consisting of different types of outlets. Each subsample has its own extrapolation factor for displaying the entire trading network. The data collected from the panel is extrapolated to the entire retail network to display the situation in the entire market.

The panel is permanent, except in cases of major changes in the city's sensus. Outlets that for various reasons drop out of the trading network are replaced with equivalent ones.

3. Data collection.

Data collection is carried out by marketing auditors. The auditor works directly at the outlet and maintains a description of all products of the studied category, which are both in trading floor, and in stock. The audit is carried out cyclically. Each audit cycle reflects sales over a two month period.

During the audit, for each unit of goods, such data as the name of the product, trade mark, manufacturer, price, quantity of goods in the warehouse and in the sales area, the main characteristics of the product (weight, taste, number of units in a package, type of packaging, etc.) are recorded. .NS.).

The auditor's responsibilities also include determining the number of purchases made by the outlet for the period, obtained from invoices and other documentation; comparison of current and past purchases of goods by this store; comparison of invoices with the actual quantity of goods in the warehouse.

The data is entered into specially designed questionnaires adapted for each outlet of the panel.

4. Calculation of reporting indicators.

All collected data are entered into databases and processed using software. For each brand of goods and for different groups of goods (in accordance with the individual requirements of the customer), the following indicators are calculated:

Number of sales of a specific brand (sales in quantitative terms)= quantity of goods in stock at the beginning of the period - the balance of goods in stock at the end of the period + purchases made by the outlet during the period. The number of sales is measured in the same units as the product (kilograms, liters, pieces, etc.).

The proportion of sales of a particular brand in relation to the total sales of products in this category= (number of sales of a particular brand / total number of sales of all other brands of the product) x 100%.

Cash volume of sales of a specific brand= the number of sales of a particular brand x the price of this brand in the study period.

Cash share of sales= (monetary sales of a particular brand / monetary sales of all other brands of the product).

Market share is determined using indicators such as weighted and numerical distribution, selection indicator, average share in turnover.

Numerical distribution (PD) Is the ratio of the number of stores in which a given brand of product is represented to the total number of a certain type stores where the consumer usually purchases this type of product, expressed as a percentage.

CR = number of traders in retail of brand Y of product X / total number of traders in product X, (%).

Weighted distribution (BP) Is the market share of product X held by retailers selling brand Y.

BP = total sales of product X by retailers who sell brand Y / total sales of product X, (%).

Weighted allocation takes into account the size of stores where a particular product is presented. For example, a weighted distribution of 60% of Brand Y for Product X means that Brand Y is represented in stores that total 60% of Product X's sales.

Selection indicator (IV)= BP / CR = average sales of product X in stores selling brand Y / average sales of product X across all retailers.

BP of 60% and CR of 20% means that the selected stores are above average size (there are not many of them, but they produce the main sales of this product). The selection indicator in this case is greater than 1, namely 60/20 = 3.

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

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

Market share (DR) = HR x IV x SD = BP x SD.

5. Analysis of the data obtained.

Based on this analysis of market share, it can be concluded that a company can, in the distribution process, increase the availability of a product and the market share of that product in the following ways:

Audit Limitations:

The benefits of an audit:

Consumer survey based on statistical sample

Market size can be determined by asking shoppers, for example, if they bought a product in a given amount of time, and then multiplying the number of affirmative responses by the average purchase volume.

The survey can be complete (related to the entire population) or selective. A full survey is conducted if the population is relatively small (for example, a highly specialized segment industrial market) or if very detailed information is required. If a sample is made, then only part of the representatives of the general population is interviewed, and the results are approximated with a given degree of accuracy for the entire general population.

The representativeness of the sample is a mandatory characteristic. This means that all significant characteristics of the population are presented in the sample in the same proportion in which they are distributed in the general population.

Significant characteristics are defined as those that can influence the results of the survey. The sample can be representative if the following requirements are met:

The sample size significantly depends on what limits of accuracy and reliability are needed in a given study. That is, we have to set such indicators as the confidence interval and the confidence probability.

Confidence interval (Tdov,%) is your predefined sampling error. For example, if you set a confidence interval of 3% and the answers to a specific research question are 48%, this means that even if you survey the entire population, the real value will fall into the interval between 45 (48-3) and 51% (48+ 3).

Confidence probability ( Rdov,%) shows how confident you can be in the results obtained and that the characteristics of the sample correspond to the characteristics of the entire studied population. In other words, with what probability the random answer will fall into the confidence interval. In the overwhelming majority of studies, 90–95% is sufficient.

If you combine the confidence level and the confidence interval, then we can say that the answers to the question with a 95% probability will fall in the interval between 45 and 51%.

When approximating the results for the entire general population, it is assumed that the studied indicator has a normal distribution. To assess the accuracy of the study, the standard deviation (s) is used, calculated by the formula:

where p- the expected share of positive answers. This value is not known exactly in advance, but it affects the sample size. The largest sample size will be required if the answer choices are split 50 to 50%;
q = 1 — p ;
N- sample size.

An important property of the normal distribution is that 95.4% of all observations lie between the sample mean and 2. This means that at a confidence level of 94.5%, the confidence interval will be ± 2 of the mean. The rest of the relationship between the confidence and the confidence interval is shown in the table.

This pattern is valid for any normal distribution. The coefficient by which we multiply the standard deviation to obtain the boundary of the interval is called z-value, and a table like this is also called z-table.

EXAMPLE. The company sells a software product for automating the workflow of enterprises. This product is only suitable for large and medium-sized enterprises. The product is licensed based on the number of workstations. We know data on the average purchase volume of this product (the cost of the total number of automated workstations) for large and medium-sized enterprises. Based on a statistical sample, it is required to determine the market size of a product for a certain period in a given region.

According to the terms of the problem, the general population is limited to enterprises of only large and medium scale. Let's define: large enterprises - with more than 1000 employees, medium - from 500 to 1000 people. Using statistical reference books, we find the addresses and other details of enterprises, as well as how many such enterprises were registered in the study region at the end of the study period.

Let's say the number large enterprises- 1000, medium - 5000.

If you cannot find reference books with such information, you can contact the services of a local marketing / information agency.

Further, the task comes down to making a random sample from the found enterprises and getting from its participants an answer to the question: did their enterprise buy similar software products over a given period of time?

Since the volume of purchases from large and medium-sized enterprises is different, the general population should be divided into two strata and each stratum should be examined separately.

We define the required research accuracy as Rdov= 90% and Tdov= 5%. This means that for our sample, we want to determine the number of enterprises that bought a product in the entire general population with a reliability of 90% and a maximum error of 5%. According to the z-table, these parameters give us the following information: the standard deviation multiplied by 1.65 (the z-value corresponding to a 90% observation percentage) should be 5%.

From here we find that the standard deviation in our random sample should be equal to:

Let, based on our experience and knowledge of the market, we assume that the product could be bought by about 20% of enterprises in each stratum, that is, the parameter p is equal to 20%, respectively q = 80%.

We substitute these values ​​into the standard deviation formula (1) and find the required sample size:

where N = 174 enterprises.

There is one more nuance here. We have just found the sample size assuming the population size is infinitely large. In our case, this is not the case, and the number of enterprises is limited. Therefore, the required sample will be smaller.

There is a formula that allows you to adjust the required sample size if the size of the general population is known:

We calculate the new sample size.
For medium-sized enterprises: N '= 174 / (1+ 174/5000) = 168 enterprises.
For large enterprises: N '= 174 / (1+ 174/1000) = 148 enterprises.

As you can see, the smaller the general population, the more noticeable the difference in the sample size.

So, we determine the number of companies that bought a software product by asking the research participants the question: "Have you bought similar software products in the period t?"

Answer options:

We summarize the results in a table. For example, the answers were distributed as shown in table. 1.

Table 1

Poll results

We see that in our sample, 67 medium-sized businesses bought the product. This represents 40% of the general population. This means that with a 90% probability, one can expect that in the entire general population, the product was bought by 35 to 45% of enterprises, i.e. from 1750 to 2250 enterprises (35 and 45% of 5000, respectively).

Knowing the average purchase volume for each group of enterprises, we determine the market size in each stratum by multiplying the number of enterprises by their average purchase volume. Average purchase volume can be determined from our own sales data.

We enter the calculation data in table. 2.

table 2

Market size calculation

The total volume of the market for medium and large enterprises is obtained by adding the indicators of the two strata.

So, with a 90% probability, the market size of our product is in the range from 67,500 to 92,500 thousand dollars.

As you can see, the total error is quite large. However, the required accuracy is determined from the purpose for which we are determining the market size.

For example, the goal is to determine our market share.

Let the sales of our company be $ 6 million, of which we sold a product for medium-sized enterprises for $ 3.2 million, and for large enterprises - for $ 2.8 million.

This means that in the market of medium-sized enterprises, our share is in the range from 4.7 to 6%:
(3.2 million / 67.5 million) x 100% = 4.7%.
(3.2 million / 52.5 million) x 100% = 6%.

This margin of error is usually acceptable. If not, take a large sample.

In real studies, most often it is not so much the accuracy of the obtained values ​​that is important as the possibility of comparing these values ​​over different periods of time. Therefore, the confidence interval is selected on the basis of the possibility of comparing values. That is, if next year we use the same method, then the error will be the same.

Sample size differences are also not always important. For example, sample size is critical if market shares are being determined and it is necessary to study the situation with competitors that occupy a share comparable to the confidence interval (say, 2-5%), or when several product groups are studied and analysis is required for each group separately.

In industrial market research, the main difficulty is finding the required number of respondents. To interest respondents, as a rule, they are offered a certain reward - gifts, discounts, participation in sweepstakes.

In surveys, for greater efficiency, several goals are set at once in addition to determining the size of the market, for example, determining preferences, further intentions of the consumer, creating a database of potential customers, etc. Therefore, the questionnaire is not limited to one question.

Indirect methods

In the absence of statistical data or lack of time and money for statistical research, apply indirect methods... These methods estimate market size very roughly. Therefore, they need to be applied, guided by the following rules:

Fractional method.

If we have data on the market size of an entire industry, then we can estimate what share our product class occupies in the entire industry.

For example, let's estimate the market size electronic document management... Electronic document management refers to the market of automated software systems. Open source (IDC report Services 2005—2009 Forecast and 2004 Vendor Shares- these are paid studies, but some of their fragments are published openly) it is known that the volume of the market for automated software systems in Russia in 2004 was estimated at $ 1.9 billion. Document flow costs account for about 4-5% of all costs for the implementation of automation systems (according to expert assessments of participants in this market). Consequently, the volume of the electronic document management market in 2004 is from 76 to 95 million dollars. If we compare this figure with the data of special studies, for example, the market research of the RBC agency (RosBusinessConsulting, analytical report “Market of electronic document management systems in Russia”, Moscow, 2004), then we get approximately the same values.

Probabilistic method.

For example, you are selling software... Your potential customers are commercial enterprises, certain sizes and industries operating in a certain area.

Determining the size of the market requires answering a number of questions. It is advisable to use data in the answers, relying on as real arguments as possible. The accuracy of the probabilistic method entirely depends on this.

Question 1. How many potential consumer firms know about my firm and product?

Let's say about 10%.

Question 2. How many potential customers who know about my company and about the product can use the product from a technical point of view?

Let the answer be 70%.

Question 3. How many potential customers who know about my company and about the product can use the product from a technical point of view, how many is suitable for my company as a supplier of goods? Your company may not suit them because of its reputation, location of the office, language of communication.

For example, this is 25%.

Question 4. How many potential customers who know about my company and about the product can use the product from a technical point of view, and how many potential customers who are suitable for my company as a supplier of goods can afford to buy the product?

For example, 10 out of 100 companies will actually pay for the program, the rest will be acquired illegally. But if the program is protected by some key, this will not happen, the program simply cannot be bought without a license.

Let's say the answer is 10%.

We multiply the probabilities: 0.1 x 0.7 x 0.25 x 0.1 = 0.00175.

This means that our program has a market share of 0.175.

Let's say our firm's sales are $ 200,000 per year.

Therefore, the market size is (200,000 / 0.175) x 100 = $ 114,285,714 = $ 11 million.

Market size can be estimated based on the total number of customers who have contacted us and their average purchase amount.

For example, a manufacturing company shop equipment wants to estimate the market share of point-of-sale terminals for 2004. It is known that the average time for making a purchase decision, i.e. the time difference between the date of the client's contact with the company and the date of the actual purchase is 2 months (an indicator typical for the industrial market). The company itself sells point-of-sale terminals and keeps records in the CRM system.

Let's say a marketer receives the following data from a CRM system:

average purchase amount at POS - $ 7,000 ( Sср).

The number of clients (companies) who contacted the company regarding the point-of-sale terminals in the period from November 1, 2003 to November 1, 2004 is 200 (). We take such dates in order to take into account the time of the decision. That is, we assume that customers who have contacted the company during this period will make a purchase only after 2 months, namely from January 1, 2004 to January 1, 2005.

The market size is determined by the formula:

where is the volume of the POS market in 2004 in monetary terms. The numerator of the formula is the volume of the market, provided that all customers who bought terminals in 2004 (from us or from competitors) have previously called our company;
- correction factor. This is an amendment for clients who, for various reasons, did not call our company. The coefficient is determined by expert advice or based on customer surveys. For example, we know that only 90% of customers know our company and our cash registers. Of these, about 70%, before making a purchase anywhere else, will definitely call us to find out our conditions (it is clear that recognized market leaders will have a higher percentage than small companies).

Based on this, the kpopr is 0.90 x 0.7 = 0.63.

That is, the number of people who called us is 63% of the real number of customers who bought cash registers.

Total = ($ 7,000 x 200 customers) / 0.63 = $ 2.22M

Expert survey.

Market size is often determined based on a survey of experts.

Experts can be enterprise specialists, industry consultants or specialized organizations, as well as consumers of products.

There are several methods of expert interviews (Table 3).

Table 3

Expert survey methods

Expenditure method (method of standard consumption).

This method consists in summing the product consumption rates multiplied by the number of consumers.

For example, it is known that every resident of Ukraine drinks 10 liters of beer per year (data from the statistical office). There are 48 million people in Ukraine.

Capacity of the Ukrainian beer market in physical terms = 48 million x 10 liters = 480 million liters.

Provided that the average cost of a liter of beer = 1.5 hryvnia, then the capacity of the Ukrainian beer market in monetary terms = 480 million x 1.5 hryvnia = 720 million hryvnia.

This method can be based on how much money the consumer can spend to purchase the proposed product. First, the total income of the residents of the study region is calculated. Then the result is adjusted for the unsaved share of the population's income, then - for the share in the population's expenditures corresponding to the project of the commodity group or subgroup. The data for these calculations can be found on the websites of the State Statistics Committee and The central bank Russia.

The market capacity calculated in this way usually turns out to be overestimated, so this method can be called optimistic.

Income method.

Here, the calculations are based on annual turnover one of the market players working with similar products. Some of them publish the results of their work in the press, indicating even their market share. To find data on the size of the local market, the result must be adjusted by determining the share of enterprises of this type in the total sales of the selected group of goods. The data obtained in this way on the volume of the regional market can be used for development in another region, but at the same time it is necessary to take into account the data of the State Statistics Committee on the ratio of the purchasing power of the regions. This method is pessimistic.

Extrapolation.

Historical data are extrapolated based on past growth rates.

Direct accounting methods

Press monitoring.

In the case of the industrial market, when there are few sellers, few buyers, and each purchase costs a lot of money, the market size can be calculated by directly adding data on projects announced by competitors.

Enterprises working for similar markets, as a rule, publish information about their projects in the press and on the Internet (since there are not many projects, they strive to tell about each at least on their own website). Thus, by carefully following the emerging information, by monitoring the press, competitive and thematic Internet sites, you can collect very accurate information about all projects in this industry for reporting period.

Statistics and credentials.

Exclusive

Often a company has access to specific data, which can be used to accurately determine the size of the market.
Let's go back to the POS example. It is known that a special stamp must be attached to all POS terminals upon sale, which certifies that this type of POS terminal is approved for use by the State Tax Inspectorate. It is also known that the right to manufacture and sell such stamps belongs to only one organization.

If we manage to find out from this organization how many stamps were sold per year, then multiplying the number of stamps by the average cost of the POS, we get the market size and our share in it (based on our own sales data).

Another example: the market of electronic document management systems on the platform Lotus Notes / Domino.

All companies selling software on the platform Lotus Notes buy licenses for Lotus from IBM (the manufacturer of this platform). Therefore, IBM has all sales for this region. The market size is multiplied by the number of Lotus licenses sold by the average software cost.

Public data

If you are selling a product that is imported from overseas, then customs databases can be used.

Some industry associations and statistical bodies collect and publish information on the overall sales of their industries.

However, such statistics can be very inaccurate. Majority Russian companies never provides accurate information about the volume of services produced or sold (double-entry bookkeeping, left income, etc.) and tries in every possible way to bypass the existing rules (no matter what it concerns - customs, accounting or something else). Consequently, in Russia it is hardly possible to say that you have accurate information about the market or about any company (unless we are talking about a market where there are only a very limited number of sellers or a limited number of buyers).

So, there are many methods for determining the size of the market. And their number, of course, exceeds that described in this article. It should be noted that in Russian practice, companies pay much more attention to promoting finished products rather than research requiring high-quality baseline data. Serious quantitative research is time consuming and costly, and is not justified for every company. Therefore, marketers often estimate the market "offhand" using expert assessments... However, with the development information technologies and with the proliferation of CRM systems for quantitative research, more and more opportunities are emerging.

LITERATURE

1. Materials of the training course for the retraining program in marketing // State University of Management "RIMA", 2002.
2. F. Marketing Management Millennium. 10th ed. - SPb., M., Kharkov, Minsk: - Publishing house "Peter", 2000.
3. Avdeev V.Yu. Application of sampling methods in audit. http://www.audit-it.ru/viborka.php?foprint=1.
4. Haig P., Haig N., Morgan K. Marketing research in practice: Basic methods of market research. - Ballance Business Books, 2005.
5. Anurin V., Muromkina I., Evtushenko E. Marketing Research of the Consumer Market: Unique Domestic Experience / Tutorial... - SPb .: Publishing house "Peter Print", 2004.
6. Materials of the site http://marketing.spb.ru.

See also on this topic.

Attention!

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

This article is for informational purposes only!

You can familiarize yourself with the full list of our services.

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The 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 make long-term 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.

Objectives of the analysis of the market share of the enterprise

Analysis of the market share of an enterprise as a marketing tool is used, as a rule, to achieve the following goals:

to increase the efficiency of dealing with competitors in the market;

to gain a competitive advantage.

The data on the volume of own sales will not show the entire state of affairs in the market, will not give a complete understanding of what is happening with the company 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, if not negative, for the enterprise. Or it may be the other way around: the sales volumes of the enterprise are decreasing, but the analysis shows that the fall of the entire market is going even faster. This means that the company is in a pretty good position.

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

The analysis of the market share of the enterprise is carried out on the basis of a specific segment base, which is determined by choosing, according to certain characteristics, competing goods. The underlying market can include a territory, product group or product category, sometimes the segmentation can be more detailed.

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

External factors can equally affect products manufactured by 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.

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

A similar effect is likely when a particular product is removed from the underlying market.

For the correct calculation of market share, it is necessary 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, these can be:

Federal statistical offices.

Product Manufacturers Associations.

Trading networks that carry 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, it is necessary to compare all the data at your disposal. This means that it is desirable to work with information taken from different sources rather than dwelling 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 the volume of sales of products of this product group, calculating their percentage.

Market share shows the effectiveness of the marketing department of the enterprise. Do not forget that today there is no methodology capable of giving 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 its part, a separate segment (that is, the element in respect of which various market participants are actively competing).

If it is impossible to calculate data on sales volumes in a specific 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, the analysis of the market share of an enterprise can be carried out using several fairly effective methods. For example, the following:

In kind. The result is presented as a percentage: a number showing the number of units of goods sold by one specific enterprise is related to the volume of sales in this market (identical units are calculated).

In value terms. The way in which the result reflects the value of the product being sold.

According to the method of Parfitt and Collins. A technique that analyzes 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.

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

Brand market share = Brand penetration * Repeat purchase brand* Brand consumption intensity

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

Re-buying a brand is a measure of “loyalty” to a particular brand. It is calculated as a percentage of multiple purchases of products of a given brand within a certain time period.

Brand Consumption Intensity is the average ratio of purchases by repeat consumers to the average purchase rates of all product groups in that category.

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

Qн- this is the volume of sales of a particular company;

Qtot Is the total volume of the given market.

It is worth noting that 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 give preference to the value of the indicator, because the price for a commodity unit is not always known, and it can be very different from that set by competitors. As a result of differences, the data in kind can be very, very inaccurate.

An example of an analysis of the market share of an enterprise

Consider an elementary example of analyzing an enterprise's market share:

In the city of N, there are 4 companies that manufacture sewing products: Strizh (with a monthly sales volume of 70 thousand rubles), Chaika (with a volume of 80 thousand rubles), Lastochka (85 thousand rubles. ) and Ivolga (65 thousand rubles). The management of the Strizh company decided to determine the market share belonging to their enterprise. What is needed for this?

First, you need to establish the total market volume. This can be done by adding up the sums of the sales volumes of all companies represented on it (it turns out 300 thousand rubles). This is Q total (the denominator of the above formula). It remains just to make the calculations: 70,000: 300,000 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 made only if there is data on the dynamics of the market share and changes in its volumes.

What factors influence the results of the analysis of the company's market share

The share change depends on indicators such 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 product portfolio of the enterprise (you can use the matrix method 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- most important factor... Even at the stage of preparation for work, it is necessary to carry out. It is likely that an analysis of the company's market share will show the inexpediency of entering a specific market due to insufficient resources.

There is such a thing as "perfect competition". It denotes 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 the volume of sales. Thus, if the market sells standardized, non-individualized products, the company is unable 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 the competitor as a threat to its market share, which means that it considers it senseless to be interested in the production decisions of competing firms and carry out. Any company can obtain information on prices and estimated profit margins, therefore it is possible to take emergency measures when market conditions change. This is done by investing in some factors of production after the implementation of others. Sellers are free to enter and leave the market because there are no barriers to work. However, as nothing prevents the termination of the company.

Imperfect competition can 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 company's market share shows a direct dependence on the efficiency of salespeople (the better they work, the higher the share).

Consider material incentives as an example. This motivation consists in setting a certain level of sales set by the manufacturer in front of the stores in order to target high sales rates. The program is implemented by holding competitions between points of sale (stores), and the indicators can be both relative and absolute. For example, a store that has sold a larger quantity of goods (as a percentage) within a specified period of time compared to previous indicators can win a competition. Or, for example, you won a store that generated more sales than others retail outlets(shops) for a certain period of time.

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

Let's look at a few examples. A food company motivated staff to increase shelf space at a time when new products came out of the shop so that the new product was clearly visible to the buyer. Another company whose activities are related to the market household appliances, increased its income almost 3 times after motivating the sale of washing machines in one of the largest retail chains... The terms 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 by nationality.

In order to analyze the market share of an enterprise, a large amount of information is required, which is not so easy to obtain. Here it is important to stock the database with information from trusted sources. Therefore, it is worth contacting professionals. 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 product market statistics as information for strategic decisions, identifying market demand... The main client categories are: exporters, importers, manufacturers, participants in product markets and B2B business services.

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 wrong, to put it mildly, how much will your loss be worth? When making important strategic decisions, it is necessary to rely only on reliable statistical information. But how to be sure that this information is reliable? You can check it! And we will give you that opportunity.

The main competitive advantages our company are:

Accuracy of data provision... A preliminary selection of foreign trade supplies, the analysis of which is made in the report, clearly coincides with the subject of the customer's request. Nothing superfluous and nothing overlooked. As a result, we get accurate calculations at the output. market indicators and market share of participants.

Preparation of "turnkey" reports and ease of work with them. Information is quickly perceived as tables and graphs are simple and straightforward. Aggregated data on market participants are summarized in ratings of participants, market shares are calculated. As a result, the time for studying information is reduced and there is an opportunity to immediately proceed to making decisions that are “on the surface”.

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

While market share is the most important metric of a company's marketing performance, there is no generally accepted perfect method to measure it. The company's share can be calculated both in the market as a whole, and within a particular segment served. Served segment - part of the total volume of the market for which there is a competition. In a situation where the volume of sales in the market as a whole is unknown, the share is determined relative to:

• regarding the 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 physical terms (in piece terms) - the number of units of goods sold by a particular company as a percentage of the total sales in the market, expressed in the same units.

Market share by piece = Piece sales (quantity)
sales (%) Volume of piece sales throughout the market (quantity)

This formula can, of course, be transformed to output either unit sales or market-wide unit sales in two other variables, as shown below:

Piece sales = Market share by piece sales (%) * Volume of piece sales throughout the market

Market share in value terms (in terms of sales)... Market share by volume of sales differs from unit market share in that it reflects the prices at which goods are sold. In fact, relatively in a simple way calculating the relative price is the division of the market share by sales volume by the market share by piece 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 method (P&C technique). For the calculation, data from panel surveys are used (i.e., a study conducted on a constant sample of consumers). The following formula is applied for calculations (in%):

Brand market share = Brand penetration * Brand reacquisition * Brand consumption intensity.

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 for a certain period to which this brand belongs. Re-acquisition of a brand characterizes the loyalty of consumers to this brand. It is defined as the percentage I of repeat purchases made by customers over a certain period from among those who have already purchased the given brand at least once. Brand consumption intensity is calculated as the ratio of the average consumption of a given brand of repeat buyers to the average consumption of all groups in a given category of goods.