Before you compete for more market share, you must consider your motives, as gains in market share may not translate into additional profits. Market share can, however, position your company as a market leader, increase your bargaining power and improve your perceived reputation among customers. To achieve success, creativity and risk-taking are essential. You need to evaluate where your company -- its products and services -- currently stand in relation to competitors. Then you must act to implement strategies to acquire more market share. Any number of strategies can lead to market-share gains.
1. Assess your existing and potential customers. To gain more share of customers, you first need to understand your customers in terms of who they are, the types of products they buy and from whom they make their purchases. Also, take the time to identify consumers' wants and needs and their typical budgets. This may involve administering surveys, cold calling or even direct mail. Identify potential customer groups by reading market reports, industry journals and demographic surveys.
2. Innovate with new products or services. Product innovation creates excitement and "buzz" in the marketplace, which in turn generates interest among consumers and increases your competitive advantage and popularity. Look for examples of innovative companies in market segments different from your own to understand how product innovation can fuel success. After evaluating consumer data regarding what customers need and want, brainstorm the types of products and services that may fill a void and outpace your competitors in the process.
3. Identify the distribution channels through which you currently sell goods and services. Evaluate these against current distribution channels. For example, perhaps a large segment of consumers in your market buy online and your products are only available in stores. Make plans to increase distribution methods, such as adding online purchasing systems, selling directly to consumers or increasing the number of retail stores that sell your products.
4. Lower your prices. According to Steven Schnaars, author of "Marketing Strategy: Customers and Competition," lowering prices is one of the most common ways to gain market share. To offer lower prices, find ways to cut production costs and other expenses, and pass the savings along to consumers. By offering low prices, you position your company as a low-cost alternative to other competitors. This strategy also supports consumers in all types of economies, including during a recession.
5. Increase promotional and marketing activities. Mounting advertising campaigns, such as television, radio or Internet advertising, requires upfront capital and essentially involves buying up more advertising than your competition in an attempt to become known, popular and/or recognized. In some cases, you may be able to find markets that your competitors have neglected or have yet to discover. You can increase your advertising in these areas, which may lead to market-share gains.
6. Improve product and service quality. Product quality, from the customer's viewpoint, refers to the degree to which a product satisfies preferences and expectations. It can include virtually any aspect of the product (e.g., design, characteristics and features) that makes it more reliable or desirable to consumers. According to a 1999 article by Hellofs and Jacobson in "The Journal of Marketing," increasing product quality can lead to market-share gains. In turn, according to the authors of the article, market-share gains can influence consumers' perception of your product and increase demand for it.
- "Marketing Strategy: Customers and Competition"; Chapter 10: Market-Share Strategies; Steven Schnaars; November 1997
- "The Journal of Marketing"; Market Share and Customers' Perceptions of Quality: When Can Firms Grow Their Way to Higher Versus Lower Quality?; Linda Hellofs et al.; January 1999
- Harvard Business School Working Knowledge; Marketing Your Way Through a Recession; John Quelch; March 2008
- San Diego State University ROHAN Academic Computing; Linking Marketing and Corporate Strategies; Rick English
- Business Link: Assess Your Customer Base
- Business Link: Use Other Channels to Market
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