Market Share: From inception, one of the main focuses or objectives of a business is to make as much profit, gain market share, and be a leading player in the industry. Companies have incorporated expansionary measures in their “Strategic planning” and made possible projections to achieve as much ground and become a market players. Realistically gaining market share could be one of the most demanding or upheaval tasks, especially for new and emerging businesses. In business studies, we have come to learn that as a business entity, it’s either you create a new product for a new market, a new product for an existing market, a new demand for a current product or a need for a new product, we would consider these further in the article.
In an open market economy, where there is free entry and exit, or a highly competitive market, gaining market share has become a little meticulous about consumer behaviour and prevalent economic situations.
Gaining market share involves several factors, including pricing policy, sales and promotions, advertising and marketing, customer loyalty, product branding and packaging, economies of scale, and economic or governmental policies.
Before launching a new product into an existing or new market, research and development must carrie out a must-do feasibility study to show if the product will survive the market and the entire product life cycle analysis. It should also monitor how a new product can thrive in the market and for how long.
Having considered all of that, we need to look at what can help a product gain market share and sustainability.
Factors That Can Influence The Market Share Of A Product
Pricing is key to any business; it can see as the life wire; the pricing makes or mars the product’s survival. In fixing prices, the business must be sensitive to the environment it operates. If it’s a monopolistic market, it can choose to set whatever price it wants, but in an open market, costs will controller the forces of Demand and Supply, and as such most businesses are price takers rather than price givers. Also, in an open market, prices can be influenced by the cost incurred during production, but since they’re not allowed to fix whatever price they choose, they tend to reduce cost while keeping up with the benchmark in “Quality” offered.
Pricing plays a pivotal role in the survival of a product and its longevity on the market. Business owners should try as much as not to cut the cost to the point where they begin to compromise quality but rather follow through on operations of major industry players to gain a reasonable level of comparative advantage. Methods such as “Break down analysis” and “Value Re-engineering” could help achieve this feat. For the introduction of new products, pricing methods such as PRICE PENETRATION, where lower prices are charged compared to the similar product from another manufacturer, can be used at the initial stage of introduction to gain a reasonable market share before adjusting to the regulatory price of the product in the market.
Marketing, Sales And Promotion
Having manufactured a product must be sold to generate revenue and continue the production process. Also, a market must have been created for the product or should trade in the existing market.
It must convey the knowledge of the product to the target consumer, which can do promotion. Promotions aren’t just about creating awareness about the product; it also includes giving the customer sales incentives such as discounts, after-sales service, souvenirs, sponsorship, sales campaign, etc.
Advertising is also a part of a promotion; information about the product will become passe to the consumers. Advertisements could be informative, persuasive, etc., depending on the goal of the data.
Also Read: Keys to Invest in a Profitable Business
Branding And Packaging
Branding is giving a product identity or reputation in the market. Brands could be in the form of trademarks, differentiated designs, and the like. Some companies have built BRANDS over the years and have become the priceless jewel of their industry. So whatever product such brands produce to sell in the market gets very high patronage. So building a “brand” should be of the utmost in the minds of any business person. It helps your product to stand out.
The packaging is as good as branding, but packaging deals mainly with the outlook and attractiveness of the product. How well a product package could determine how much a consumer will be willing to pay for it.
Economies Of Scale
As a company or business grows, it begins to take advantage of its growth and expansion in a sense that. It can acquire raw materials at a relatively low price and other incentives, which affect the product’s unit price in the long run. It could quickly charge a Lower fee compared to those of its competitors. They can reduce the cost without compromising the quality of the product. Also, the firm could have a very standard production setup, which reduces all the bottlenecks in production. Enables it to deliver at lower prices, better quality, and record time to its customers.
Merger And Acquisition
Another way by which a product can gain market share is through mergers and acquisitions. Two firms producing similar products or carrying out similar activities may choose to merge into a single. But a more prominent firm thereby brings both customers under the same brand, which increases the market share of products produced by that firm in the long run. In the same vein, a more prominent firm might seek significant or controlling interest in a smaller firm. They were acquiring its assets in part or whole. Such action brings expansion and also affects the market where they operate. They have a more comprehensive range of products and services, a customer network base, and overall profitability.
Government Or Economic Policies
Finally, the government influences the market situation in some countries, especially in socialist economies. Firms can take advantage of this opportunity to improve their activities and increase their market share. They may prefer certain kinds of goods, especially those produced locally; they can also ban some products giving their competitors an edge. The government could provide incentives like subsidies, tax breaks, patent rights, or use prices to favour certain products giving such a comparative advantage. a
In conclusion, it is essential for any business which chooses to succeed as a going concern to pay great attention to increasing its market share. It should incorporate it into its corporate strategic plan and set objectives to achieve. Market share improves overall profitability and gives the business a comparative advantage over other firms.
Also Read: What Are the Benefits of Content Marketing?
Review What Market Share And How to Work ?. Cancel reply