Measuring Marketing

Chapter 10 Relative Market Share

Measurement Need

The need is how to measure a company’s performance compared to its leading competitor.

Solution

Relative market sharei provides insight on how a brand or specific product is performing compared to the largest competitor’s performance in a specific brand or product category.

$\mathrm{Re}lativeMarketShare\left(\%\right)=\frac{\text{Brands}\text{Market}\text{Share}\left(\text{revenues}\text{or}\text{units}\right)}{\text{Largest}\text{Competitors}\text{Market}\text{Share}\left(\text{revs}\text{or}\text{units}\right)}$

For example, in the luxury car market in 2016 BMW and Mercedes had the following unit sales:

–BMW had 2 million units; and

–Mercedes had 2.23 million units.

Therefore, BMW’s relative market share to Mercedes is:

$\begin{array}{l}\frac{2,000,000\left(\text{units}\right)}{2,230,000\left(\text{units}\right)}={8.9}^{\text{ii}}\\ \frac{\$94.16\text{b}(\text{revenues ...}}{}\end{array}$