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Marketing
- PREV DEFINITIONMarket LeaderDefinition: A market leader could be a product, brand, company, organisation, group name which has the highest percentage of total sales revenue of a particular market. Market leader dominates the market by influencing the customer loyalty towards it, distribution, pricing, etc. Description: Market leader can be attributed to a firm which has the largest market share in a given industry. The term could also be ascribed to a firm which has the highest profitability margin as well. The market share is calculated by dividing the volume of goods sold by a particular firm by the total number of units in the market. Market leadership as a concept holds much relevance in the internet age because over a period of time we have seen large number of companies becoming market leaders. Market leader often enjoys the first -mover advantage in new markets. Let’s look at some examples of market leaders in the digital space. Microsoft was the first company to launch operating system (Windows) and web browser (Internet Explorer) in the market. Apple as a company was the first one to introduce the concept of portable media device in which music can be stored on a drive, ipod. Market leadership is not about sales and dominance but it is more about how relevant the product is for the audience. Apple generates more revenue by selling iPods compared to other manufacturers who are selling MP3 players. It is all about innovative ideas which will help the company to connect with the relevant audience. The company tries to introduce those products in the market which can add value to the customer. Market leaders often unveil products which can redefine the customer experience in terms of product quality, longevity, ease of operating that product etc.Read More
- NEXT DEFINITIONMarketing IntelligenceDefinition: Marketing intelligence is the external data collected by a company about a specific market which it wishes to enter, to make decisions. It is the first set of data which the company analyses before making any investment decision. Description: Marketing intelligence is usually the first data set analysed by a company about a specific market. It could be related to population age in that area, infrastructure facilities, spending habits of consumers, state or government regulations etc. Marketing intelligence is all about gathering information on various data sets, analysing the information, breaking down the data into small subsets and the distribution of information to the relevant department of the company. A purchase department in a company would need a different data set under marketing intelligence, while a sales department would need something different. There are four main corner stones of marketing intelligence. The first one is competitor intelligence, the others are product intelligence, market understanding and customer understanding. Let’s understand each one of them in detail. Competitor intelligence is a legal method of obtaining information about products in a competitor’s portfolio. It is about analyzing strengths and weaknesses of the competitor. The basic goal of competitive intelligence is to make better business decisions. Product Intelligence is related to gathering information about your own product. The focus around product intelligence is on gathering information about the quality and performance of the product. This is usually an automated process. With the help of this knowledge, the company tries and makes the user experience better or makes changes in the product itself to make it safer or add new features. Market Understanding is a concept wherein the company tries to understand the performance of the product in which it is already operating as well as looks at other markets where it wants to launch its product thoroughly. Finally, understanding the customer is the utmost important aspect in the life of any product. It is key to the success of the product pre- and post-sales.Read More
Definition of 'Market Share'
Definition: Out of total purchases of a customer of a product or service, what percentage goes to a company defines its market share. In other words, if consumers as a whole buy 100 soaps, and 40 of which are from one company, that company holds 40% market share.
Description: There are various types of market share. Market shares can be value or volume. Value market share is based on the total share of a company out of total segment sales. Volumes refer to the actual numbers of units that a company sells out of total units sold in the market. The value-volume market share equation is not usually linear: a unit may have high value and low numbers, which means that value market share may be high, but volumes share may be low. In industries like FMCG, where the products are low value, high volume and there are lots of freebies, comparing value market share is the norm.
The significance of market share: Market share is a measure of the consumers' preference for a product over other similar products. A higher market share usually means greater sales, lesser effort to sell more and a strong barrier to entry for other competitors. A higher market share also means that if the market expands, the leader gains more than the others. By the same token, a market leader - as defined by its market share - also has to expand the market, for its own growth.
How much market share is enough? Usually, gaining 100% market share is not a good idea, as the risk associated with market actions, like fashion changes, product / use changes will impact the company heavily. Also, the cost and effort to maintain 100% market share against nimble, local or more aggressive smaller competitors can be very high and killing. Most companies decide on a target market share beyond which the cost of acquiring marketshare is more than the profit from that incremental gain.
Description: There are various types of market share. Market shares can be value or volume. Value market share is based on the total share of a company out of total segment sales. Volumes refer to the actual numbers of units that a company sells out of total units sold in the market. The value-volume market share equation is not usually linear: a unit may have high value and low numbers, which means that value market share may be high, but volumes share may be low. In industries like FMCG, where the products are low value, high volume and there are lots of freebies, comparing value market share is the norm.
The significance of market share: Market share is a measure of the consumers' preference for a product over other similar products. A higher market share usually means greater sales, lesser effort to sell more and a strong barrier to entry for other competitors. A higher market share also means that if the market expands, the leader gains more than the others. By the same token, a market leader - as defined by its market share - also has to expand the market, for its own growth.
How much market share is enough? Usually, gaining 100% market share is not a good idea, as the risk associated with market actions, like fashion changes, product / use changes will impact the company heavily. Also, the cost and effort to maintain 100% market share against nimble, local or more aggressive smaller competitors can be very high and killing. Most companies decide on a target market share beyond which the cost of acquiring marketshare is more than the profit from that incremental gain.
- PREV DEFINITIONMarket LeaderDefinition: A market leader could be a product, brand, company, organisation, group name which has the highest percentage of total sales revenue of a particular market. Market leader dominates the market by influencing the customer loyalty towards it, distribution, pricing, etc. Description: Market leader can be attributed to a firm which has the largest market share in a given industry. The term could also be ascribed to a firm which has the highest profitability margin as well. The market share is calculated by dividing the volume of goods sold by a particular firm by the total number of units in the market. Market leadership as a concept holds much relevance in the internet age because over a period of time we have seen large number of companies becoming market leaders. Market leader often enjoys the first -mover advantage in new markets. Let’s look at some examples of market leaders in the digital space. Microsoft was the first company to launch operating system (Windows) and web browser (Internet Explorer) in the market. Apple as a company was the first one to introduce the concept of portable media device in which music can be stored on a drive, ipod. Market leadership is not about sales and dominance but it is more about how relevant the product is for the audience. Apple generates more revenue by selling iPods compared to other manufacturers who are selling MP3 players. It is all about innovative ideas which will help the company to connect with the relevant audience. The company tries to introduce those products in the market which can add value to the customer. Market leaders often unveil products which can redefine the customer experience in terms of product quality, longevity, ease of operating that product etc.Read More
- NEXT DEFINITIONMarketing IntelligenceDefinition: Marketing intelligence is the external data collected by a company about a specific market which it wishes to enter, to make decisions. It is the first set of data which the company analyses before making any investment decision. Description: Marketing intelligence is usually the first data set analysed by a company about a specific market. It could be related to population age in that area, infrastructure facilities, spending habits of consumers, state or government regulations etc. Marketing intelligence is all about gathering information on various data sets, analysing the information, breaking down the data into small subsets and the distribution of information to the relevant department of the company. A purchase department in a company would need a different data set under marketing intelligence, while a sales department would need something different. There are four main corner stones of marketing intelligence. The first one is competitor intelligence, the others are product intelligence, market understanding and customer understanding. Let’s understand each one of them in detail. Competitor intelligence is a legal method of obtaining information about products in a competitor’s portfolio. It is about analyzing strengths and weaknesses of the competitor. The basic goal of competitive intelligence is to make better business decisions. Product Intelligence is related to gathering information about your own product. The focus around product intelligence is on gathering information about the quality and performance of the product. This is usually an automated process. With the help of this knowledge, the company tries and makes the user experience better or makes changes in the product itself to make it safer or add new features. Market Understanding is a concept wherein the company tries to understand the performance of the product in which it is already operating as well as looks at other markets where it wants to launch its product thoroughly. Finally, understanding the customer is the utmost important aspect in the life of any product. It is key to the success of the product pre- and post-sales.Read More
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