In simple words, market share is the total percentage of sales a company has in its entire market. It is the most vital component of any business and perhaps the most significant indicator of business success.
Profitability is a core objective of all firms and industries. Several experts confirmed the linkage of higher market share with higher profitability. Hence, you will rarely find any business that does not want to increase its market share. An increase in a company’s share allows it to operate on a more significant level and enjoy economies of scale by lowering costs. It also helps in building brand loyalty, improves the brand image, and boosts sales. Firms have also started noticing a tremendous increase in their customer base. Still, the most significant benefit of a higher market share is enjoying competitive advantages. When companies successfully attain a high percentage share of their respective markets, they take a big step towards becoming industry leaders. That means a company’s dominance over its industry increases, and it starts to enjoy an upper hand.
Now that we know the cruciality of having high market leadership, let’s talk about ways businesses can attain an increased market share.
Improve your marketing
Your level of marketing can make or break your business. Building a brand image is highly essential in today’s competitive environment. If your firm does not have one, it will suffer. It will become hard to make an impact and even tougher to connect with customers. When pursuing an online Master of Business Administration, the first few things you learn include the importance of building a holistic marketing strategy. Today, eLearning is helping marketers and business professionals alike to master the art of brand building. And that’s because organizations are constantly seeking individuals who can devise unique value propositions for their brands.
Building a solid marketing strategy is essential for several reasons. You earn the trust of your audience, experience an increase in sales, and, most importantly, build your brand’s reputation. You need to ensure that your marketing strategy aligns with the mission, visions, and objectives you set for your company.
Innovation is critical to business success. It improves your company’s productivity, reduces costs, and increases turnover. Your sales increase, profitability improves, and proactivity boosts. Innovation gives your brand an edge over your competitors. It helps you build better connections and penetrate the market faster and more effectively.
You must realize that we reside in a highly technology-driven world where advancements are occurring by the minute. There are several examples of brands that became market leaders simply because of their innovative strategies. Take Apple as an example. Its sleek designs and distinctive features have taken the company to new heights. Similarly, Sony keeps upgrading and improving its play station with more recent models from time to time. It is one of the reasons why it has nearly 58.61% of the home console share.
Another example could be Snapchat. It started as an ordinary photo-sharing app but slowly incorporated other elements such as edits and filters to promote photo-sharing communication. The app quickly gained momentum and has become one of the most significant social media forums today.
The gist being that innovation is crucial if you want to increase your market share.
Mergers are becoming increasingly common, especially within big companies. Acquiring a competitor company is an excellent and guaranteed way to increase market share.
Acquisitions not only offer access to a more extensive customer base, but the acquiring party also gains access to increased capital and experts. There is lower risk, significant cost reduction, and higher diversification. Acquisitions also make overcoming entry barriers and time loss simpler and avoid retaliation from existing companies. However, the most considerable advantage of it is the reduced competition and higher dominance over the industry.
Likewise, companies can also realize the same goal through mergers like the Google and Android merger in 2005. One of the most prominent mergers to ever occur, resulting in Android taking a market leader position. It holds almost 73% of the share of the mobile OS market.
Focus on your niche market
It might sound strange to advise targeting smaller groups when you are trying to increase your market share. But an essential thing you must never forget, your profit lies only in your niche audience. Targeting larger audiences (especially those who do not have an interest in your offerings) will lead to wastage of resources and cost you a hefty sum.
Instead, it would help If you stick to your niche. Remember, concentrating on one idea, one product, and one target market at a time allows you to identify real customers. Build a strong brand identity with distinctive characteristics. It helps build hype and attract traffic. For instance, several people can immediately recognize McDonald’s by looking at its yellow and red ‘M’ logo. It is because of the eatery’s highly established brand recognizability. Hence, instead of gaining all kinds of customers, it would be best to focus on producing quality products and establishing strong brand loyalty.
Discounts and benefits
As our world progresses, it also becomes increasingly competitive. If you want to create dominance over a specific industry, staying ahead of the competition is highly essential.
Pricing plays a critical role in beating the competition. Naturally, people will lean towards purchasing from companies that are offering the lowest prices. Hence, you must ensure to continuously keep reviewing your price and compare it with your competitors.
You can also consider offering discounts and benefits as an additional incentive for consumers. It will not only draw customers’ attention but also instantly increase your volume of sales. It’s a great marketing tool that increases brand awareness, word-of-mouth recommendations, and mass exposure.
Standard discounts and benefits include coupons, buy one get one free, free subscription to websites, etc. Recently, free delivery has become a pretty attractive feature for online customers.
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Attaining a higher market share isn’t only about becoming the industry leader. It’s about a company’s competitiveness and its capability of growth. Plus, understanding your market position can help you identify your business’s flaws and strengths and then assist you in strategizing accordingly.
However, it is crucial to understand that a higher market share does not always mean lucrative returns. Sometimes companies cannot take on the pressure of added responsibilities that come with becoming an industry leader. Instead of benefiting, businesses start to suffer.
Therefore, before implementing any tactic, ensure your business is strong enough to comply with and run successfully.