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12.4 : Market Metrics

To truly capitalize on market metrics, it is essential to grasp the deeper insights each one offers. Market share represents the percentage of an industry's total sales earned by a company, serving as a benchmark for tracking performance over time. Consistently increasing market share indicates successful strategies, while a decline may signal the need for a strategic overhaul. Relative market share is your strategic advantage in a rapidly changing market. It compares your company's market share to its largest competitor, providing crucial context within the industry. A higher relative market share often correlates with greater pricing power and brand loyalty, giving you a competitive edge.

Market concentration assesses how much a few firms dominate an industry, reflecting the level of competition. High concentration suggests significant market power for a few companies, leading to less competitive pricing, while lower concentration can foster innovation and opportunities for differentiation. Market penetration measures the percentage of a target market that has purchased a company's product, indicating product reach and acceptance. High penetration may signal market saturation, limiting growth, while low penetration can reveal untapped potential, guiding targeted marketing and product development.

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