4.1 Market share

$\text{market share}=\frac{\text{firm’s sales}}{\text{total sales in the market}}\times 100\%$

reasons to calculate market share

• find the potential number of customers in a market

• sales volume (# of products sold to customers)

• number of competitors

• market share is usually measure by sales revenue but can also be expressed as a percentage of sales volume (units sold).

• organizational objective: increase market share. largest market share is called the market leader