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How to Calculate Market Share

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Your market share represents the percentage of an industry, category, or the total sales within a market earned by your company over a set time period. Market share as a metric is used to give a general idea of the size of a company in relation to the overall market the company exists within, and its competitors.

Why Market Share Matters

The main goal of marketing is to attract and retain customers by promoting why your product or service is better than your competitors. So, to measure if you're successful in that goal, you need to assess your performance within your industry or category.

Your Market Share should factor into a lot of marketing planning, and it should be analyzed consistently throughout the year to better understand the various sources of performance.

How To Determine Your Market Share

Determining your market share is relatively easy assuming you know how many sales for your type of product or service has occurred within the industry in a given time. Let's take a look at how to figure it out:

What Your Market Share May Tell You

A rising market share is typically a good sign however, you need to note whether the increase is because you may have dropped your price or if the category is changing and your competitors are leaving the market for some reason. In either case, knowing this number helps you gauge your situation.

If you want put strategies and tactics in place to try and increase your market share, it's best to focus on product or service innovation, developing deeper – and stronger – customer relationships, or by acquiring smaller competitors.

If this video helped, please consider subscribing to our YouTube channel to stay informed as to when we release a new Ad Math video. And if you have a marketing metric that you'd like us to break down, let us know and it may just be our next Ad Math topic.

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