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In a way yes but sometimes the answer can be no also.
Let me analyse the "yes" first. Market share define how well a particular product is doing viz a viz the competition. To gain market share strategy and USP are very important. Market share also indicate the proportionate revenue earning . The higher the share more is the revenue. But higher market share should not make any manufacturer complacnt. In todays marketing environment where companies from no where is giving run for money to top multinational. One always need to evolve the product at a regular basis and product life cycle should be paid attention too.
"NO" not 100% because there are various other factors like positioning and territory mapping etc. These play an important role. A product, revenue per se may be doing very well but market share may be low.
Market Share is the most Important metrics to know about the financial health of companies and is generally used to judge the effectiveness of any possible revenue generating effort, such as marketing campaigns, branding initiatives, or CRM programs.
The reason for this is simple market share shows you how you are doing compared to your competition, allows you to quantify the impact your strategies and tactical execution have had on business results.
It is really a good question from Miss Mariam. In addition to our colleagues answers and their clarifications about the relation between the Market Share and Marketing Cost. I would like to confirm that the market share is mostly as an indication of the success of the marketing techniques. It represents a share of the company in the market compare with other competitors for a certain product and service required from the different categories of the existing customers in one territory or numerous territories.
Most international companies are focusing on the Market Share growing to increase size of the sales and then this growing is reflected on volume of the revenue earned per year as well as assist the company to expand in the market for a new Products, Services and Systems and reduction the marketing cost with increase the future sales opportunities in the market. Some International Companies adopt a specific strategy to have the market firstly and not looking for a high revenue realized.
Market Share is one of the most important key performance indicator to how successful your marketing techniques. As the market share only provides partial insights to how well you are doing against your competitor and in the market itself, understanding your customers are also a vital part of the success of the marketing techniques. Cost per acquisition, purchasing order, sales growth for each marketing campaign launched, and the customer satisfaction, along with new customer acquisition are important aspects to measuring how well your marketing techniques are performing. This also depends on the objective you set, as each objectives/goals have different KPIs as priority for achievement.
Yes, The market share will illustrate the amount of cash flow to the company.
Not necessarily. If your CX or logistics is not great, if your sales force is not committed, it will affect your MS, no matter how great markeiing / advertising.
In normal circumstances market share does reflect successfulness of marketing techniques. When I said normal , I mean in normal business circumstances not abnormal and exceptional cases.
A marketing strategy is an overall marketing plan designed to meet the needs and requirements of customers. The plan should be based on clear objectives. A number of techniques will then be employed to make sure that the marketing plan is effectively delivered. Marketing techniques are the tools used by the marketing department. The marketing department will set out to identify the most appropriate techniques to employ in order to make profits. These marketing techniques include public relations, trade and consumer promotions, point-of-sale materials, editorial, publicity and sales literature.As we know that marketing techniques are used at three stages.
Before Marketing , During Marketing activity and after Marketing activity. It is actually gives data and MIS to evaluate the performance , which includes , sales , cost , customer base etc.
In reality it gives direction to management and company....
Marketing strategies are the result of a meticulous market analysis. A market analysis forces the entrepreneur to become familiar with all aspects of the market so that the target market can be defined and the company can be positioned in order to garner its share of sales. A market analysis also enables the entrepreneur to establish pricing, distribution, and promotional strategies that will allow the company to become profitable within a competitive environment. In addition, it provides an indication of the growth potential within the industry, and this will allow you to develop your own estimates for the future of your business.
I agree with Mrs Jasmina Malnar
The Answer is a YES and a NO.
Yes, for the obvious reasons that since your marketing plans/ strategy is a solid one you have a larger market share.
NO, because the objective of any marketing strategy is to enhance the business's profitability and maintain brand position. To elaborate:
CASE 1:
One can dump container after container of goods in the market at throw-away prices and thereby increase my market share but If these price are not profitable for them to operate then it can the strategy is a failure. (ironically there are some business that operate in this manner to gain guaranteed profit from the service revenue generated later.) One would say that it does not happen, but the reality is it does happen far more often than we think it does.
CASE 2:
One can sell more or dump at a profitable price and increase its market share considerably and YET the Marketing strategy may be a great failure- this can be true for Premium brands. The brand is premium not necessarily have a high cost of production, most of them charge a exorbitant premium, while other premium brands make it difficult for everyone to be "Qualified/ Eligible" to buy their products. These are Brand Positions they have chosen.
When one drops the prices too much or makes it easily available to too many and increase their market share profitably, the Premiumness of the Brand erodes away and many a times it will be impossible for the brand to command its earlier respect and premium. Therefore this marketing strategy has failed even with increased market share.
Some companies comprise the market for their product or services and therefor, do not have a corresponding market share. That is why industry indexes are important.
