# Methods for determining the market share, Statistical...

## Methods for determining market share

The market share is another important indicator of the marketing efforts of the enterprise and characterizes the position of the enterprise relative to its competitors. Quantitatively, the market share is defined as the ratio of the volume of sale of the enterprise's goods to the total volume of sales of goods of the same category in the market, expressed in percent.

The market share can be calculated in various ways:

• in terms of sales of goods in physical terms

where Q i is the sales volume that a firm can realize; Ер - market capacity;

• Using the formula

where Q max is the company that has the maximum sales volume (in value terms, in the serviced segment, relative to the sales of a number of the nearest competitors, relative to the market leader, the leading competitor).

Absolute market share D i of the firm i in the market is defined as the ratio of the turnover of the firm T i to the total volume sales in the market (Σ T i)):

The relative market share is calculated by the formula

where T ki is the sales volume of the main competitors.

The chain relations method can be used both for estimating the capacity of the market for industrial goods and for consumer goods. The essence of the method is as follows.

1. A working hypothesis is being constructed on the dependence of market capacity on a number of market factors. It is assumed that this dependence is determined by the formula

where K 1 , K 2, etc. - coefficients that reflect the impact of each of the market factors on market capacity. In this case, each of the following (from left to right) coefficient refines the result obtained by introducing the previous coefficient. For example, K is the total population in the given territory; K 2 - the proportion of the male population in the total number; K 3 - the proportion of men aged 20 to 40 years in the total number of male population, etc.

2. With the help of desk or field studies, the numerical values ​​of the coefficients K 1 , K 2 , K n.

3. The market capacity is calculated.

The qualitative estimates of the market include the following.

1. Brand ratings on the market (according to the rating in the analysis of advertising media, but the frequency, area, time of advertising, according to experts).

2. Market share matching (large, medium, small), which can be established based on ABC analysis (Pareto hypothesis): a large share (group A), it includes 15% of major brands, trade firms or manufacturers , providing 65% of the market turnover; average (group B), when the next 20% of brands provide 20% of the remaining market; small - C, when 65% of the remaining brands have a market share of 15%.

3. The level of quality of services provided by expert estimates. Based on aggregate feedback from consumers and competitors, it is possible to objectively assess the level of service quality of a particular firm or brand. It is advisable to use a comprehensive quality of service indicator

where Σ x 1 - the number of respondents who rated the quality of the services provided on the "excellent"; Σ x 2 - good & quot ;; Σ x 3 - "satisfactory"; Σ x 4 - "unsatisfactory & quot ;. The sum of the values ​​of service indicators will be determined from the questionnaires.

The higher the K value, the better the service. The limit of significance can be equal to 1, when all buyers rated the quality of service as "excellent". For interval estimation of the quality range, it is recommended to use the table. 6.5.

Table 6.5

Customer Service Quality Ranges

 Quality of Service Interval Quality Score 0.9-1.0 Great 0.8-0.89 Good 0.7-0.79 Fair Less than 0.7 Unsatisfactory

A variation of the evaluation is the following procedure. When assessing the quality of service, a generalized indicator K is used for estimating the four groups of buyers - A, B, C, D, based on customer feedback:

where X 1 - the number of respondents who rated "excellent"; X 2 - the quantity with an estimate of "good"; X 3 - is satisfactory & quot ;; X 4 - "unsatisfactory & quot ;. The range of significance tends to five, when all buyers rated the service as excellent and good. The higher the significance of the coefficient K (), the better the service.

## Statistical analysis of expert assessments

According to the expert survey conducted (Delphi method), a survey table was compiled on the prospects of the sales volume X (Table 6.6).

Table 6.6

Data of the questionnaire on the prospects of sales, million rubles.

 Expert Sales volume forecast Expert Sales volume forecast Expert Sales volume forecast 1 21 11 17 21 22 2 14 12 16 22 15 3 19 13 21 23 18 4 18 14 20 24 16 5 16 15 18 25 19 6 22 16 18 26 23 1 14 17 16 27 17 8 15 18 21 28 19 9 18 19 16 29 19 10 20 20 19 30 17

To determine the optimal number of groups at equal intervals, the Sturgess formula is recommended:

where N is the number of experts.

The width of the interval is (Xmax - Xmin) /m = (23-14)/S = 1.8. The results can be presented in Table. 6.7.

Table 6.7

Ordered Variation Series Data

 Metric The value of the metric The sales volume in the interval series, thousand rubles. 14.0-15.8 15.8-17.6 17.6-19.4 19.4-21.2 21.2-23.0 The average value of the interval (y i) 14.9 16.7 18.5 20.3 22.1 Number of experts who preferred this option ( m i) 4 8 10 5 3

The average value of the forecasted sales volume determines the most probable value of the indicator, since its calculation is based on the ordering of a variety of trends and opinions. In this example,

The amount of sales, for which the largest number of experts (fashion) expressed, characterizes the sales volume variant, which is most often encountered in this variation series. This indicator when predicting the volume of sales is of great importance, because with its help it is possible to identify the prevailing judgment of specialists on the issue under study. Sales volume (fashion) will be:

where - respectively, the upper and lower boundaries of the interval indicator, for which the largest number of experts voted; m r-1 , m r , m r + 1 - respectively the frequencies of the preceding, given and subsequent intervals.

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

[...]

## Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

## How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)