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Market Position Measures

In: Business and Management

Submitted By no925
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MARKET POSITION MEASURES - Slide 1
Market Share
- Percent of Sales
Talking Point -Percent of sales is one measure of market share. For example, if a small electronics firm sells $2 million in a market with a total of $100 million in sales, its market share is 2 percent. That is just one market. Market share can be difficult to calculate for those that don't know their competitors' sales figures, and that's where private market research firms such as Nielsen and The NPD Group come in. They keep track of market share figures for various industries. These companies usually monitor market shares on an annual basis.
- Percent of Units Talking Point- Companies can calculate market share using sales units. For example, a small bottled-water distributor may sell 10,000 units per year out of the 100,000 sold in a local market area by all competitors combined. Therefore, its market share is 10 percent for that market. Unit market share may be more useful in some cases, as companies can better derive average product prices of competitors. They can use this information to better price their own products. Nevertheless, it is best to have access to both sales and unit market share figures.
Talking Point: Market share is one of the primary indicators companies use to measure how well they are doing versus competitors. Market share is the percentage of business sales by all competitors combined in any given market.
Pros - There are several key advantages to building market share. One advantage is increased bargaining power, according to Quick MBA, an online reference site. Top companies with the largest market shares may get special deals on products, as their buying power is likely greater than smaller companies'. The bigger company sell more products, which leads to bigger orders from their suppliers. Retailers, wholesalers and showroom outlets may be willing to allocate…...

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