MKTG600 Marketing Management : Market Share Analysis

percentage is one method of measuring market share. It can be hard to calculate it if one does not know competitor sales figures (Suttle, 2017). Some companies use private market research companies to get such data and calculate their marketing share. Market share in terms of sales can be calculated on an annual basis.

The simulation exercise compared the market share of backpack purchase in terms of different segments of the market, that is, schoolchildren, luxury trend followers, university students, urban commuters and outdoor enthusiasts. In the simulation exercise, market share for Team 4 was calculated against the other competitors and the figures are as shown in the table below for Quarter 4, 2017 (Grant, 2017).

Table 1- Q4 2017 Segment Sales Data

Market Segment	Total Market	Total Market in %	Growth Rate	Total Segment Sales	Team 4 Market Share	Total Sales for Team 4
Urban Commuters	23397	20%	3%	235	11%	27
School Children	37885	32%	1%	559	0%	0
Luxury Trend-followers	6553	5%	7%	52	15%	8
University Students	30299	26%	5%	77	0%	0
Outdoor Ensthusiasts	17017	14%	5%	429	33%	142
Totals	115152	97%	4.19%	1352	25%	177

As shown in the table above, Team 4 holds 25% of the total market share for backpacks. Its sales were highest in the outdoor enthusiasts segment where it managed 33% of the total sales for that particular segment. In the Urban Commuters segment, the team managed 11% of the total sales. From the analysis, the team was able to tell through sales, what percentage of the market share that it holds.

Percent of Units

Unit percentages are another way of calculating the total market share. Here, the company can compare how much it sold as compared to its direct competitors. It can be useful as an organization is able to derive the average product pricing for a particular product in a particular market. This information can then be used in the pricing of the organization’s own products (Suttle, 2017). The table below whose data for Q4 2017 in terms of pricing and competitors and the positioning of team 4 (Grant, 2017).

Table 2- Backpack Sales Q4 2017 Competitors Data

	Total Units	Market Share	Unit Cost
Team 1	213	20%	$ 35
Team 2	208	17%	$35
Team 3	25	2%	$26
Team 4	177	25%	$62
Team 5	102	15%	$59
Troy	627	19%	$12

The above table shows the backpack market share that each of the competing teams had. Unit price was different depending on the features that were offered by a backpack. The more the features, the higher the production cost was hence the unit cost went up. We can see that despite the cost of Team 4’s backpack being high at $62, they managed to get a larger market share of 25% due to the features that were provided in their backpack. This goes to show that consumers prefer products, which offer numerous benefits and would rather purchase these than purchase a cheaper product with fewer benefits. Team 4 can however look at the features of competitor backpacks so that they can enhance their product even further. They can also get to learn how the other teams managed to keep low pricing and this can assist them to save costs in future.

Pros and Cons

There are a number of advantages and disadvantages to organizations for building market share. One of the pros is that an organization will be able to have increased bargaining power. Such organisations are able to get great deals on purchases of raw materials as their buying power is large. In the above case, Team 4 will be able to get discounts on their raw material purchases as they have a larger market share hence produce more. Such companies will also be able to get more space in selling platforms like in showrooms and retailer shops. This is due to the rate of product sales. A large market share also helps a company to build its brand (Suttle, 2017). Consumers know more about the product and give important feedback, which can be used by the company to improve on product features, hence build a great brand.

Generally, companies are able to improve their market share through improving product features and styles and offering exactly what the consumer needs. The pricing of a product can also be key in determining market share (Suttle, 2017). Organizations can also spend more money on advertising so that awareness about the products is created.

References:

Grant, J (2017). Marketing Simulation for MBA 620.  Retrieved from https://www.mhpractice.com/activity/play/b74ca915-ab38-49db-bd52-a6f4d98088bc 

Suttle, R (2017). What is Market Share? Retrieved From https://smallbusiness.chron.com/market-share-10349.html