MKT 300 Chapter Notes - Chapter 2: Herfindahl Index

• School: Ryerson University
• Department: Marketing
• Course: MKT 300
• Professor: Armand Gervais

Document Summary

Chapter 2: share of hearts, minds, and markets. Market share is the percentage of a market accounted for by a specific entity: expressed in terms of units or revenue. Unit market share (%) = unit sales (#) / total market unit sales (#) Revenue market share (%) = sales revenue ($) / total market revenue ($) Market share is an indicator of how well a firm is doing against its competitors. Sales growth resulting from primary demand (total market growth) is less costly and more profitable than by capturing share from competitors. A firm should not define its market too broadly or too narrowly. Managers must determine whether a calculated market share is based on shipment data, channel shipments, retail sales, customer surveys, or some other source: in some occasions, it may be a combination of these. There may also be potential bias in reported shares: report shares tend to be from surveys of customer usage.