Definition
Brand Share identifies the amount of dollars spent by consumers on a particular brand relative to the total amount spent on all competitive brands in the same category. It is expressed as a percentage. This metric is also known as market share or share of market. Companies set marketing goals to achieve a specific brand share and formulate strategies to meet those goals.
Examples
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Coca-Cola in the Beverage Industry: If Coca-Cola’s sales amount to $20 million and the total sales in the beverage industry amount to $100 million, Coca-Cola’s brand share in this market would be 20%.
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Apple in the Smartphone Market: If Apple sold $500 million worth of iPhones in a given quarter and total global smartphone sales were $2 billion, Apple’s brand share would be 25%.
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Nike in the Sports Apparel Market: If Nike’s revenue in the sports apparel sector is $1 billion out of a total sector revenue of $5 billion, Nike’s brand share in this category would be 20%.
Frequently Asked Questions (FAQs)
Q1: Why is brand share important?
A1: Brand share is crucial as it helps a company gauge its position relative to competitors in the same market. It can guide strategic decisions about marketing, sales, and product development, aiming to increase market penetration and dominance.
Q2: How can a company increase its brand share?
A2: Companies can increase their brand share through various strategies, such as improving product quality, launching aggressive marketing campaigns, innovative product developments, taking market segmentation and targeting into account, and enhancing customer service.
Q3: Is brand share the only metric for evaluating market performance?
A3: No, brand share is just one of many metrics used to evaluate market performance. Other important metrics include customer satisfaction, profitability, brand recognition, and customer loyalty.
Q4: Can a high brand share be a disadvantage?
A4: While a high brand share is usually advantageous, it can sometimes lead to complacency, reduced innovation, and increased scrutiny by regulatory bodies which might invite antitrust investigations. Also, dependence on a single market can be risky if the market conditions change.
Q5: How is brand share measured?
A5: Brand share can be measured by comparing the brand’s sales revenue to the total sales revenue of the market and expressing it as a percentage.
Related Terms with Definitions
- Market Penetration: A measure of the extent to which a product or service is recognized and bought by customers in a particular market.
- Sales Revenue: The income from sales of goods or services before any costs or expenses are deducted.
- Competitive Analysis: A systematic assessment of the strengths and weaknesses of current and potential competitors.
- Brand Equity: The value that a brand adds to a product or service based on the perception by consumers.
- Customer Loyalty: The likelihood that existing customers will continue to buy from the same brand.
Online References
Suggested Books for Further Studies
- Marketing Management by Philip Kotler and Kevin Lane Keller
- Competitive Strategy: Techniques for Analyzing Industries and Competitors by Michael E. Porter
- Building Strong Brands by David A. Aaker
- Principles of Marketing by Gary Armstrong and Philip Kotler
- Market-Based Management by Roger J. Best
Fundamentals of Brand Share: Marketing Basics Quiz
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