Question

One of the most common ways a company assesses the performance of one of its brands is by measuring its market share and comparing its market share to competitors. In many​ cases, it is common for someone to read a report for a​ brand's market​ share, reported as a​ %, but little or no context is given about how that market share​ % was actually calculated. It turns out the decisions that go into the market share calculation can have substantial impact on how to report and interpret a​ brand's market share. In this​ problem, you will be asked to calculate the market share for several different brands using several different market share calculation approaches. In​ addition, another important aspect of market share calculation is to understand whether the sales units or sales revenues are being calculated in terms of purchases made by the end consumer or by shipments made to marketing intermediaries like wholesalers. Many companies do not sell their products directly to end​ consumers, so on one hand it makes sense to count sales to intermediaries as the relevant measure of market share. On the other​ hand, this approach can create deceptively high market shares for a brand if intermediaries overstocked a brand and are now unable to sell the product in a timely manner.

Looking at the marketing intermediary​ results, which brand has the greatest sensitivity to their market share​ % depending on which calculation is​ used?

Calculate the unit market shares and revenue market shares for the marketing intermediaries data. ​(Round to the nearest​ percent.)

	Marketing Intermediaries Data
	Unit Market Share	Revenue Market Share
OUR BRAND	nothing​%	nothing​%

Metrics 9.2

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Pricing Mini​ Case: Understanding Market Share by Volume and by Sales

One of the most common ways a company assesses the performance of one of its brands is by measuring its market share and comparing its market share to competitors. In many​ cases, it is common for someone to read a report for a​ brand's market​ share, reported as a​ %, but little or no context is given about how that market share​ % was actually calculated. It turns out the decisions that go into the market share calculation can have substantial impact on how to report and interpret a​ brand's market share.

In this​ problem, you will be asked to calculate the market share for several different brands using several different market share calculation approaches. In​ addition, another important aspect of market share calculation is to understand whether the sales units or sales revenues are being calculated in terms of purchases made by the end consumer or by shipments made to marketing intermediaries like wholesalers. Many companies do not sell their products directly to end​ consumers, so on one hand it makes sense to count sales to intermediaries as the relevant measure of market share. On the other​ hand, this approach can create deceptively high market shares for a brand if intermediaries overstocked a brand and are now unable to sell the product in a timely manner.

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Does it appear that marketing intermediaries may be overstocking any of the​ brands? If​ so, for which brand does this overstocking problem appear to be most​ severe?

The overstocking problem appears to be most severe for

Competitor A

.

Looking at the marketing intermediary​ results, which brand has the greatest sensitivity to their market share​ % depending on which calculation is​ used?

Calculate the unit market shares and revenue market shares for the marketing intermediaries data. ​(Round to the nearest​ percent.)

	Marketing Intermediaries Data
	Unit Market Share	Revenue Market Share
OUR BRAND	nothing​%	nothing​%

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	Marketing Intermediaries Data		End Consumer Data
	Avg. Unit Price	Unit Sales	Avg. Unit Price	Unit Sales
OUR BRAND	​$26.726.7	30 comma 00030,000	​$37.3837.38	27 comma 00027,000
Competitor A	​$18.118.1	26 comma 00026,000	​$27.1527.15	20 comma 80020,800
Competitor B	​$12.412.4	15 comma 00015,000	​$17.3617.36	16 comma 50016,500
Competitor C	​$25.425.4	6 comma 0006,000	​$43.1843.18	7 comma 8007,800
TOTALS		77 comma 00077,000		72 comma 10072,100

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Answer 1

Competitor C has the greatest sensitivity to their market share % depending on which calculation is used.

Competitor C has the highest revenue market share of 39%

Competitor C also has highest average unit price for both marketing intermediaries as well as End consumer data