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Week 2: Market share analysis II - Coggle Diagram
Week 2: Market share analysis II
Market share (MS)
Unit market share of brand A (%)
= Unit sales of brand A/ Total market unit sales
Revenue market share of brand A (%)
= Sales Revenue of brand A/ Total market revenue
Market share critically depends on
market definition
should specify
the category/ sub category, time period and region adequately
should be
relevant
to the
objectives
as well as the
competitive environment
of the brands
too broad
market definition: may dilute the focus => unrealistic goals
too narrow
market definition: missed opportunities
Relative price index of brand A
= avg price of brand A/ weighted avg price of all brands =
Revenue market share of A/ Unit market share of A
Market share vs sales (p.5)
Relative market share (%)
= focal brand's market share/
largest competitor's
market share
BCG matrix (p.6)
competitive intensity
in a category
firm concentration ratio (%)
= sum of MS of top 3 or 4 firms in the market
HFI (Herfindahl) Index
= sum of squared MS of all brands => measure of
market concentration
- domination of firms in the market
more information (p.8)
Drivers of market share
Penetration share
Market penetration
= No of customers purchased in the
category
at least once/ Total no of customers
Brand penetration
= Total no of customers purchased the
brand
at least once/ Total no of customers
Penetration share
= No of customers who purchased the
brand
/ No of customers who purchased in the
category
=
Brand penetration/ Market penetration
example (p.12) ppt
measure brands' popularity within its category
Share of Wallet
Revenue share of wallet
= Brand Purchases ($)/ Total category purchases by brand buyers ($) =
Unit SOW x relative price of index
Unit share of wallet
= Brand purchases (#)/ Total category purchases by brand buyers (#)
example: p.14 ppt
Usage
Heavy Usage Index (HUI)
= avg total purchases in the category by
brand customers
/ avg total purchases by
all customers in that category
(remember to calculate in
average
)
Market share decomposition
Revenue Market share
= Penetration share x Share of Wallet (SOW) x HUI
Example: p.18
Unit market share
= Penetration share x Share of customers x HUI
more details: p.22
Strategic consideration
Summary: p.22