In one line
Market share is your sales divided by the whole market's sales, for the same market and the same period, times 100. Count it in money and you get value share; count it in units and you get volume share.
What it does
- Step 1: define the market. A share means nothing until you say which category, which shops or channels and which period: a brand can lead in convenience stores and trail in supermarkets.
- Step 2: take your sales and the market's total from the same source. Retail audits such as Circana and NielsenIQ measure sell-out, what shoppers buy; your own shipments (sell-in) give a different answer.
- Step 3: divide. Volume share = your units ÷ the category's units. Value share = your sales value ÷ the category's sales value. Multiply by 100 for a percentage.
- Step 4: report changes in points. A share that goes from 20% to 22% is up 2 points, which is a 10% rise in share. Mixing the two is the most common slip in share reporting.
- Relative price links the two shares: value share ÷ volume share is your average price against the category's. Above 1, shoppers pay you a premium.
Business and brand
Impact on the businessP&L, cash, share price
- Sales growth and share growth are different questions: your sales can rise while your share falls, if the market grows faster.
- Value share is closer to net sales, so boards usually set targets on it; volume share drives factory load and unit cost.
- Where most buying is habitual, share moves by tenths of a point a quarter, so read the trend over several quarters, not one.
Impact on the brandMemory, loyalty, pricing power
- Share grows mostly by adding buyers, not by selling more to the same ones (lesson 2).
- A value share above volume share shows shoppers pay more for the brand.
- Share bought with deals shows up in volume share first, and fades when the deals stop.
Try it
Divide it yourself
Pick one change to Brightwater's plan and a quarter. The engine reports every brand's sales to shoppers; the table adds up the category and works out both shares.
| Brand | Units | Volume share |
|---|---|---|
| Halvard Cola | 95.73 | 59.1% |
| Brisa | 35.65 | 22.0% |
| Brightwater | 30.52 | 18.9% |
| Category | 161.91 | 100% |
| Brand | €m | Value share |
|---|---|---|
| Halvard Cola | 108.94 | 56.3% |
| Brisa | 47.86 | 24.7% |
| Brightwater | 36.61 | 18.9% |
| Category | 193.41 | 100% |
| Volume share | 30.52 ÷ 161.91 | 18.9% |
|---|---|---|
| Value share | 36.61 ÷ 193.41 | 18.9% |
| Relative price | 18.9% ÷ 18.9% | 1.00 |
Sell-out, as a retail audit measures it: what shoppers bought and paid. Relative price above 1 means Brightwater sells above the category's average price.
Notice: Against the plan in Q4, Brightwater's value share goes from 17.2% to 18.9%: up 1.7 points, which is a +10.0% change in share. Report the points, and say so if you quote the per cent.
Runs Countermove's market engine: the reference soft-drinks market, three brands, rivals holding their plans so only your change moves the result.
Sources
- Farris, Bendle, Pfeifer & Reibstein (2010), Marketing Metrics, Wharton School Publishing: unit and revenue market share, relative price
- Sharp (2010), How Brands Grow, Oxford University Press