x% of market share ?

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The progress, health and strength of an organization is vivid in the market share figure.  For investors X holds a lot of importance.  For any industry the following table is valid. A particular business sector will have multiple organizations offering sevices with diversified portfolios and business intensions. Investers keep a close watch on it

Market Share 2000-01 2001-02 2002-03
A 13 20 30
B 25 19 13
C 15 28 40
Others

(Small & Distributed Players )

47 33 17

        The table above suggests that the A & C companies have grown fast in the market capturing the share from B & others who have not performed so well lately.  These number are calculated in two ways.

  1. Sales Calculations – Total products sold in the market is lets say 100 then A has sold 13 in 2000-01.  
  2. Revenue Calculations – Total revenue that was generated in the sector is $100 then A has $13 out of it.

Sales calculations are usually not a prominent way of doing it because a product organization might have different products in their inventor like Intel ( P1, P2, P3, P4 etc ).  Some products are more profitable than other products.

Companies adopt different Pricing strategiesand Marketing strategies to increase the market share and they also keep a close watch on this number to understand how well/bad they are doing in the business and what needs to be done next to increase the market share to increase profitability of the organization. Needless to say, leader of the market always holds the highest market share.

This type of markets are called Red Oceans where competitors lose business to each other and fight for numbers.

Having said that more market share does not mean that one is more profitable. The cost of having a market share will be in the Advertising, Marketing and R&D expenses of a particular organization. Sometimes if these are costing more than the yield from the market share concept then the organization is in trouble.

    ( Costs for Ads + Costs for Marketing campaigns + R&D costs + Others ) – ( X % Market Share Profitability ) =  -Net

There are different ways to increase/defend the market share. A few are quoted below.

1. Intensified/Provocative  sales/marketing/advertising campaigns

2. Start working on solutions that customers need than want. Innovating on product line ups. 

3. Create Market Disruptions.

4. Create White spaces.

5. Horizontal movement of the organization into other business that are related to it.

6. Merger could be an option in a tough time, especially if you are defending the market share.

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Proximity Marketing !

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Marketing is the biggest discipline which lets us know about the various features of a great product. You can offen various forms of marketing and advertising.

• Banners :- Big posters at the busiest cities.

• Pamphlets :- People distributing pamphlets in the busy areas

• Ads :- Add campaingns associated Awith media ( Newspapers, TV, Radio etc )

…. endless i can say … 🙂

However there are new ways of reaching people and those are new ways of Advertising / Marketing while consumers are close to the store or publicity unit. This is called as proximity marketing.

As you pass by the store say Levis they want to show you the latest offers or releases they have in the market. Untill some time ago, they used to use banners as tools for the same.

” Upto 50% off !”

The competition in the market has forced these sectors to innovate. They want the user to know of the offer as soon as they enter the Mall and not in the proximity of the store it self.

They turn to mobile phones.

Almost every user carries a mobile phone now a days and they carry it all the time. From a communication device, the mobile is slowly turning into a marketing device. In a lot of countries already SMS marketing has catched up pace. You get offers from multiple companies now-a-days. While some people do think this is annoying, others see it a good way to reach them to let them know of the recent development in the sales of the goods.

Like every technology has its own side efffects, Mobile industry is also going into that phase now where the connectivity technolgies invented are now slowing becoming a better way of reaching the user rather than the user trying to reach something :-).

Mobiles have features like Wi-Fi, Bluetooth, SMS etc that can be used for the same.

We will talk about each technology and its features to be used for doing the same.

WiFi :-

Travelling on a schedule, you walk up to the airport and you see an alert

“WiFi Connection available, Do you want to Connect ? “

You say “Ah, I am busy, leave me alone !!” and run to your gate to catch up with the flight.

What just happened was some company guy trying to reach you to sell something in some place while other airports just tying to offer free internet. Annoying, isn’t it ? Well, Hang on, they are trying to find innovative ways of “Not Annoying !” you and still serve their purpose.

Most of EU has this “WiFi HotSpot” oppertunity while the third world is still trying to catch up on this technology because it needs a lot of infrastructure.

Can’t blame it though ! I am from a developing nation, takes time.

Bluetooth :-

Bluetooth, famously know, is very useful to tranfer phone book contents to your friends, but there are side effects. The Advertising industry sees it as a way of reaching the user as it can also be used to reach a hotspot like the WiFi. There have been more success stories around bluetooth like Bluepod Media, because there are growing number of users who keep their bluetooth activated on the mobile due to the elevated usage of headsets and carkits.

Some users feel that these technologies have become annoying but most of the populations wants these Ads to reach them in much more polite manner.

The people who must strike this balance are the product organizations who manufacture Mobiles.

Hope they are working on them … !!

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