Transcript: Market share when assessing performance Importance of market share when assessing performance. Market share as a signal Link between market share and profitability Two causal explanations of the observed link between market share and profitability - economies of scale and market power (Jacobson, Aaker 1985) Market share concentration ratio analysis can be used to assess the markets performance, four firm concentration ratios are closely related to industry performance ( Kwoka 1979) Market Growth Market Share as signal A high current market share can signal a future high demand (Caminal, Vives 1996) Market share acts as a signal to consumers of high quality (Caminal, Vives 1996) Market share is a normalized performance measure (Houghton & Kardes 1998) Market Share Market Share & Market growth Market share is an antecedent of profitability, cost efficiencies for firms with high market share leading to greater profitability ( Szymanski et al 1993) • Deviations from expected growth should alter plans for expanding capacity (Bradburd, Caves 1982) Market share and profitability
Transcript: Example of Market share Market Share Market share is a Company's percentage of the total sales volume generated by all companies that complete in the given market. What is Market Share? Read Page14 Gabriela Barron Solution
Transcript: Marketing Strategies Pricing Strategies Promotion Strategies Place or Distribution Strtegies Sales Forecast MARKETING PLAN Notes Competitors Projection of achievable sales revenue, based on historical sales data, analysis of market surveys and trends, and salespersons' estimates. We will be operating in Kuala Lumpur where a predominantly monopolistic market structure we intend to ensure that our marketing strategies are considerate of the importance of the fit between our products capabilities and benefits, and the target market, so as to develop a strong sustainable competitive position in the market. We assume that one person will buy our product based on our target market that includes local business and government employees. Promotion Strategies Monthly Sales Forecast Place Or Distribution Strategies We provides both computer products and services to make them useful to small businesses. We are especially focused on providing network systems and services to small and medium business. The systems include both PC-based LAN systems and minicomputer server-based systems. Our services include design and installation of network systems, training, and support Pricing Strategies Profile Of Product Market Size Small business and home-office. Students. Corporate member. We must charge appropriately for the high-end, high-quality service and support we offer. Our revenue structure has to match our cost structure, so the salaries we pay to assure good service and support must be balanced by the revenue we charge. We took considerations about competitors for the selling computer hardware all around area of our location for the price that suitable for each product If it is too expensive, it might cause our customers run away and buy from our competitors. Advertisement Newspaper advertising Signboard Sales Promotion Vouchers Local Media local radio and cable TV . Marketing Budget Competitors Target Market Market Share Market Size The Hardware Wizard Company is located in areas that are developed with technology from various walks of life who can afford to own a computer. The most appropriate distribution channel to be adopted is from the manufacturer or producer to the retailer to the customer. We also choose to have a delivery service to our customer to ease them. The delivery is usually uses the company van or lorry.
Transcript: 0.05% Pangasinan 2.65% CHEMICALS FEEDS FERTILIZER SEEDS PARTS CORN OTHERS VEGGIES ANIMAL HEALTH FUNGICIDE HERBICIDE INSECTICIDE MOLLUSCICIDE RODENTICIDE SEED TREATMENT 0-0-60 14-14-14 16-20-0 17-0-17 21-0-0 46-0-0 GAME FOWL HOGS OTHERS 63.84% CROP PROTECTION FEEDS PARTS SEEDS ALLIUM CORN ONION OTHERS VEGGIES ANIMAL HEALTH BIOLOGICALS FUNGICIDE HERBICIDE INSECTICIDE MOLLUSCICIDE RODENTICIDE 0-0-60 14-14-14 15.5-0-0 15-7-13 16-16-16 16-20-0 17-0-17 21-0-0 25-0-0 46-0-0 FERTILIZER GAMEFOWL HOGS OTHERS 4.48% CROP PROTECTION FEEDS FERTILIZER SEEDS 0-0-60 14-14-14 15.5.0-0 16-16-16 17-0-17 21-0-0 46-0-0 25-0-0 16-20-20 GAMEFOWLS INSECTICIDE FUNGICIDE HERBICIDE CORN VEGGIES 7.01% FERTILIZER SEEDS VEGGIES CORN ALLIUM OTHERS RICE CROP PROTECTION INSECTICIDE FUNGICIDE HERBICIDE MOLLUSCICIDE 0-0-60 14-14-14 15.5-0-0 16-20-0 17-0-17 21-0-0 25-0-0 46-0-0 FEEDS GAMEFOWL HOGS OTHERS 10.79% FEEDS PARTS 0.32% SEEDS FERTILIZER CROP PROTECTION FUNGICIDE HERBICIDE INSECTICIDE MOLLUSCICIDE 0-0-60 14-14-14 15.5-0-0 15-7-13 16-16-16 16-16-8 17-0-17 21-0-0 25-0-0 46-0-0 OTHERS 16-20-0 CORN OTHERS RICE VEGGIES HOGS 2.34% CROP PROTECTION FERTILIZER OTHERS SEEDS INSECTICIDE FUNGICIDE HERBICIDE MOLLUSCICIDE ALLIUM CORN ONION VEGGIES 0-0-60 14-14-14 16-20-0 21-0-0 46-0-0 Isabela CROP PROTECTION FEEDS FERTILIZER SEEDS 98.03% ONION VEGGIES ANIMAL HEALTH FUNGICIDE SMAHC HOGS OTHERS 8.83% Others FEEDS FERTILIZER OTHERS PARTS SEEDS ALLIUM CORN ONION OTHERS VEGGIES CROP PROTECTION INSECTICIDE FUNGICIDE HERBICIDE MOLLUSCICIDE 0-0-60 14-14-14 15.5-0-0 15-7-13 16-16-16 16-20-0 17-0-17 21-0-0 25-0-0 46-0-0 OTHERS GAMEFOWL HOGS OTHERS
Transcript: The consumers a company wants to sell its products and services to, and to whom it directs its marketing efforts Individual work You? In what type of environment s it difficult to establish market share? The mighty Apple Why? Match up the companies to what you think is their market share? Equation? Market share *-the percentage of the market accounted for by a specific entity What is market share? Market share, target market and USP *USP -Unique Selling Point why is it important? how does this relate to your marketing strategy? task - match the descriptions of the target audiences to the potential product/company *Target market
Transcript: Inverse Drive Time (1/Drive Time) Retailer A: 1/5 = 0.20 Retailer B: 1/10 = 0.10 Retailer C: 1/15 = 0.06 Total: = 0.36 Postal District Split (Inverse Drive Time/Total) 0.20 / 0.36 = 55.55% 0.10 / 0.36 = 27.77% 0.06 / 0.36 = 16.68% Total: = 100% Retailer Opportunity (Total Opportunity x Proportional Split) 80 x 55.55% = 45 Units 80 x 27.77% = 22 Units 80 x 16.68% = 13 Units Total: = 80 Units Area Map It is an important factor for a retailer and an area manager to understand the geography of the retailers area of interest. This map can be downloaded directly from the urban science website. Consideration must also be taken as to how profitable a retailer is and what profit per new unit (PPU) a retailer makes. If a retailer shows an unusually high PPU then it could be that it is losing sales by holding out for a higher PPU and may well be able to increase its number of units sold by taking a slightly less PPU. Does a retailer have enough sales staff to cope with the number of potential customers coming through the door? If a customer cannot get the information they require from the visit to the retailer they may be inclined to leave and go elsewhere. A retailer needs to be aware of the number of vehicles that are being registered by other Volkswagen retailers with in their area. In the case of Hull 14 vehicles have been pumped into the area from their own retail group. Utilising the candidate retailer system within AFRL would have assisted the retailers market share numbers. Another area to study when looking at a retailers market share is their sales funnel performance. From this study it can be derived as to whether a retailer is seeing enough CN1 contacts (top of funnel) and what ratios (test drive and sale) they are achieving and then measure this against national average. The objective of this report is to allow future area managers to understand how a retailers market share performance can be effected and what factors contribute to a good or bad performance. Accessibilty Drive times Green 15 minutes Yellow 30 minutes Red 45 minutes During this exercise JCT600 Hull was used as a case study. Historically the retailer has had a low market share compared with its other area retailers. Sales funnel Here you can see that in postcode DN14 the retailer shares this postcode and is assigned 18.87% of that postcode, despite it being within a 30 minute drive time. Staffing Market share From the above data, it can be seen in green, the manufacturers are performing well in the area. Research conducted – cont Philip Johnson Sept 2012 As can be seen from the previous map the retailer site has some unusual geographical surroundings which may have to be taken into consideration – North Sea – to the east of the retailer is the north sea. Humber Estuary – within 5 minutes of the retailer is the Humber Bridge which requires a toll fee to cross. M62 – the retailer site sits virtually on the M62 and 30 minutes drive time along this road extends considerably into other surrounding retailers areas of influence. Conclusion From the research into the market share performance of JCT600 Hull and the creation of this presentation it can be concluded that there are a number of contributing factors that can lead to performance of a retailer. A retailer need to ensure that it is aware of all the factors that make up its share. As an area manager understanding the factors and questioning a retailer in regard to those should lead to improvement. Inverse Distance Advantage Methodology Postal districts are split and assigned proportionally to retailers based on their drive time to each district. Each target model can be analysed using competitive segment registrations. Selected Benchmark Market share can be applied to allocate an opportunity by model in each postal district. Using the proportional split given by IDA we can apportion this opportunity to the individual retailers, taking into account surrounding retailers locations to that postal district. For this Postal District: Competitive Registrations = 1,000 Benchmark Market share = 8% Total Opportunity in Postal District = 80 units Objective Pump In JCT600 Hull – location cont. A guide to how it works Retailer sites that are uninviting and have no room to park can put off potential customers from entering the showroom. Research conducted Retailer profitability Competitor analysis Data from the One Business Scorecard (OBS) has shown JCT600 Hull to be below the area and national average with a one year rolling average of 8.54% v area average of 12.58% and a national average of 12.79% (figures taken from July 2012 OBS). The figures produced for the OBS are taken directly from the Urban Science (si2) website and is taken from the 30 minute drive time data. A retailer must also be aware of how the competitors are performing in the area. JCT600 Hull - Location JCT600 Hull – Location cont. A retailer must also be aware of his assigned postcodes and what proportion of each postcode he has been
Transcript: Daniela Martinez Leonardo Madrigal MARKET SHARE Definition Agenda The market share indicates the size of the market share that a company has in a certain segment or in the total sales volume of a certain product. Advantage News Market share is an index of competitiveness, which indicates how well a company performs in the market in relation to its direct competitors. Update 1 This index allows us to evaluate if the market is growing or declining, identify trends in the selection of customers by competitors and also execute marketing, strategic or tactical actions This measure is important to discover what are the strengths and weaknesses of a company, compare its size with the competition and measure the acceptance of its products. Update 2 The company interested in knowing what its market share should consider the values of its sales in a certain period and divide them by the total sales in the same period of time. Announce-ments What's next
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