What is market share and how do you calculate it?

In the marketing industry, you may hear the term “market share” from time to time, but what does it mean? Why is it needed and how is it calculated?

Woman discusses market share during meeting

As marketers, it is important to understand market share so that you know how your company ranks against competitors and can develop new marketing strategies to reach more potential customers. In this post, we’ll outline what market share is, how to calculate it, give real-life examples, and explain how you can increase your share.

What is market share?

market share formula

relative market share

Relative Market Share Formula

market share example

How to expand your market share

Understand your market share to drive business success

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Let’s say a consumer buys 100 T-shirts, and 70 are from Company A, 25 from Company B, and 5 from Company C. In that case, Company A owns 70% market share and is the industry leader. competitor,

Market share is usually calculated for a specific period, such as annual or quarterly sales, and is sometimes separated by region.

market share formula

Formula you can use to find your business market share

Calculating your market share will give you an overall sense of your position in the industry, but it’s also helpful to understand how you measure up to your direct competitors.

relative market share

Relative market share compares your performance to industry leaders.

Instead of using total industry revenue, you are dividing your market share by your top competitor’s market share, multiplying the result by 100. The result will show you the share of the market you own in relation to your most important competitor. The image below shows the relative market share formula.

Relative Market Share Formula

Mathematical formula that is used to calculate your business relative market share

market share example

Market share can be easier to understand with real-life examples, so we’ll go over some businesses below that you may already be familiar with.

nike market share

Nike is part of the athletic footwear and apparel industry, which sells a variety of sports equipment, casual shoes, and accessories.

Nike’s global market share in sports is estimated 43.7%, The brand is an industry competitor to Adidas and Under Armour.

Tesla market share

Tesla is part of the automotive industry and manufactures Electric Vehicles (EVs). Within the US EV industry, Tesla has one over 70% market share.

It is necessary to recognize that the worldwide market for EVs is much smaller than that of standard vehicles. The market share of EV in the automobile industry is 2.8%, and tesla is .8%, These differences are important, so it’s important to analyze relative market share to compare your business to its direct competitors, not just the market as a whole.


Spotify is a music-streaming platform and has the largest music-streaming market share 31% Of the market

The second largest market share is held by Apple Music (15%), followed by Amazon Music (13%), Tencent (13%) and YouTube (8%).


E-commerce company Amazon holds the US e-commerce market share 37.8% and is the leading online retailer in the country. Walmart ranks second with 6.3%, and Apple ranks third with 3.9%.


Recent figures show that Target is the largest department store retailer in the US. 38% market share. Walmart and Macy’s both follow in second place with 13%.


Chew is an online pet products and food retailer with a market share of 40% In the US the company plans to expand to the global market in 2024 and is expected to achieve 20% market share outside the US by 2030.

google market share

Google’s market share 92.37%, making it the most popular search engine in the world. It dominates the competition, as the second largest industry leader is Bing, which has a market share of just 3.57%.

Once you’ve calculated your market share and understand how you relate to your industry competitors, you can begin creating strategies to increase your overall revenue.

How to expand your market share

Below are some strategies your company can use expand your market share,

1. Low cost.

A great way to compete in your industry is to offer low prices. This is the low hanging fruit of increasing your market share as consumers generally look for low cost products.

However, it’s also important to note that the cheapest option isn’t right for every brand. you want to make sure you are pricing products To provide value to customers appropriately but not miss out on revenue opportunities to beat competition.

2. Innovate new products and features.

Companies that invent new technology and bring it to the table often see their market share increase.

New products and features attract new customers, also known as acquisition, which is a motivating factor for generating revenue. New customers make new purchases and, in turn, contribute to higher profit margins and overall industry revenue. More significant contributions directly translate into increased market share.

3. Delight your customers.

One of the best ways to increase your market share is by working on existing customer relationships.

you can inspire customer loyalty Delighting existing customers by providing exceptional experiences and customer loyalty. Loyal customers are more likely to make repeat purchases, which increases your business revenue and contribution to overall industry revenue. As mentioned above, higher revenue contribution equates to higher market share percentage.

4. Increase brand awareness.

branding awareness And national marketing play an important role in capturing the market share. It’s important to get your name out there so customers know who you are. Becoming a household name and a preferred brand in an industry will help increase your market share.

Generally, larger companies have the highest market share because they can provide products and services more efficiently and effectively.

But why is it so important? Below, let’s explore the impact market share can have on your company.

Market share is more important in industries based on discretionary income. Market share does not always have a significant impact in continuously growing industries. However, it’s important to remember that a company can have a very high market share – also known as a monopoly.

For example, with growing industries with increasing market share, companies can still increase their sales even if they lose market share.

On the other hand, with discretionary income industries, such as travel or non-essential goods such as entertainment and leisure, the economy can significantly affect market share. Sales and margins can vary depending on the time of year, which means competition is always at its highest.

High competition often leads to risky strategies. For example, companies may be willing to temporarily lose money in order to drive competitors out of the industry and gain more market share. Once they have more market share, they can raise prices.

Understand your market share to drive business success

A low market share may tell you that you need to focus on customer acquisition, marketing to increase brand awareness, and overall strategies to increase revenue. High percentages indicate that your current plan is adequate and you should focus on that. customer retention and product innovation.

Whether your company is well established or just starting out, understanding the state of your industry is important as it will help you meet business objectives and achieve desired success.

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