What action can companies take if they start to lose market share

What Strategies Do Companies Use to Regain the Market Share They’ve Lost?

Free market capitalism is an economic system that can generate great wealth and prosperity for nations and their citizens. It is also a system defined by competition that creates winners and losers. While this competitive process can lead to innovation and invention, it can also deteriorate the market share of existing companies, with the worst case leading to bankruptcy.

What can a company do if its market share has been eroded to competitors? There are three key strategies that companies often use to regain market share once it has been lost: pricing changes, promotional changes, and product changes. All three strategies have unique benefits and all are risky for different reasons.

Key Takeaways

Lowering Prices

By dropping prices, companies hope to lure customers away from competitors. The benefit is a higher market share, but it comes at a cost: lower margins per unit.

This strategy is particularly attractive to large companies that have high economies of scale that allow them to operate at either a lower marginal cost than their competitors or that make it possible to operate at a loss if needed. It’s risky because, once prices drop, it can be hard to raise them again, unless the company regains enough market share to muscle out its competitors.

Everybody likes a good sale, and being able to entice customers to return through lower prices can be an excellent short-term strategy. But keep in mind that competitors will see this and also lower prices in turn. This benefits consumers but can lead to a race to the bottom for producers.

Promoting the Brand

Another approach is to change its methods of promotion, which can include raising the advertising budget or using the power of branding for the firm. Depending on how well company leaders identify the specific issues that need to be addressed, playing with promotional efforts can be very successful, or often just simply a costly exercise.

For example, national retailer JCPenney notably struggled with rebranding in the 2010 to 2012 period, while competitor Target (TGT) found success in the early 2000s by marketing itself as a «higher-end» discount retailer.

An excellent customer service component of a business can cause customers to stick around even if prices are better elsewhere. It can also cause customers to jump ship to a competitor, even at a premium, if it means better customer service.

Advertising, marketing, and promotion is a tried and true method of regaining market share, but keep in mind that advertising is an on-going process and the competition is spending money on advertising as well.

Updating Product Offerings

Finally, a company can revamp its offerings to better meet customer needs or to provide something new. Apple (AAPL) successfully tried this tactic in 2014 by introducing the iPhone 6, a significantly revamped version of its smartphone. An instant hit, it enabled Apple to take back some of the market share it had lost to Google’s (GOOGL) Android. This strategy can be combined with raising prices to introduce another aspect of differentiation or to position the company’s offering as a premium product.

Competition—not necessity—is the mother of innovation in the business world. Coming up with new or updated product offerings can work in the short-term, but if a company cannot keep innovating and generating new and novel products that consumers will demand in the future, it will not have a lasting effect.

The Bottom Line

In free-market economies, competition leads to different companies owning a different sized piece of the pie, meaning that all companies will have a different market share of the product or service they sell.

When a company loses its market share to a competitor, there are a few ways that they can try and gain it back. These include lowering their prices, promoting their brand, and updating their product offering. All of these strategies have their pros and cons and none are guaranteed to work, but they will start a company on the right path to becoming more competitive again.

What action can companies take if they start to lose market share?

When a company loses its market share to a competitor, there are a few ways that they can try and gain it back. These include lowering their prices, promoting their brand, and updating their product offering.

What strategies do companies employ to increase market share?

Companies increase market share through innovation, strengthening customer relationships, smart hiring practices, and acquiring competitors. A company’s market share is the percentage it controls of the total market for its products and services.

What causes low market share?

Low market growth, infrequent product and process changes, high value added, and high purchase frequency all contribute to more predictable and less turbulent environments. These markets are unlikely to attract new competitors, but they may be viewed as unexciting by existing competitors.

How can a business prevent competitors from eroding its market share?

To prevent market share erosion, a business needs to update its strategies regularly according to the changing market and the customer demands. Special consideration must be given to any technological advancements in the industry and incorporate them accordingly.

What are the four major growth strategies?

The four growth strategies

How do you increase sales?

How do I regain lost market share?

There are three key strategies that companies often use to regain market share once it has been lost: pricing changes, promotional changes, and product changes. All three strategies have unique benefits and all are risky for different reasons.

What are the three defensive strategies?

There are three strategies considered as essential elements of defensive strategy:

What does low market share indicate?

Although there are numerous ways to define successful performance and low market share, we have chosen two straightforward definitions. Low market share is less than half the industry leader’s share, and successful companies are those whose five-year average return on equity surpasses the industry median.

What does low market share mean?

Businesses with small or low market share are usually defined as those that have small percentages of the total sales within their respective industries. Using a market share growth strategy, like the BCG matrix, can help your business gain insights on industry competition.

Is low market share a weakness?

Weaknesses are internal factors which could stop or slow down organisation’s growth and success. Examples of internal factors that are a weakness are: … Low or no market share.

DriveYourSucce$$

03/28/2011

What Happens to Market Share When Revenue is Unchanged?

What happens to your company’s market share when revenue is unchanged? Does the company’s market share remain the same or decline? I’m sure you can tell where I’m going with this. I bring this up because of an issue I’ve seen over and over again with respect to the companies I’ve worked with. Most measure market share without taking into consideration the market’s growth. In this case, to have revenue remain the same, from one year to the next, is seen as having the exact same market share. It isn’t! In fact, even though the company hasn’t lost any business, it has most definitely lost market share.

This is perhaps the biggest reason why companies lose their competitive edge. They forget to include the growth of their industry and market within their own market share calculation. This means that they equate stagnant sales to stagnant market position. To these companies, if they don’t lose any volume of business, then they must have at least retained their share of the market. They end up rationalizing that the leveling out of their sales means they’ve successfully maintained or defended their market position. Nothing could be more further from the truth.

Understanding the Impact of Stagnant Business on Market Share

To defend business means to retain business, but if that’s all your company has done over the year, then it’s a guarantee that you’ve lost your share of the market. When revenue is unchanged, in an industry that is growing, means the company has in essence lost a piece of the pie. It’s that simple. This is why a number of companies become complacent. They rationalize that stagnant business growth is to be expected from time to time.

As is often the case, this indifference creeps up on businesses until they find themselves in such a weakened position, that they fail to assert themselves and their product offering. So, how does stagnant business result in lost market share? More importantly, how does unchanged revenue affect the business until it eventually loses its market position?

Why Companies Lose Their Competitive Edge

Let’s assume that your company is a key player in its market and has a relatively healthy market share. Over a couple of years, your business stagnates and its growth is minimal at best. Meanwhile, the industry itself has continued to grow at a steady rate. During this time, your competitor’s market share growth has been keeping pace with the industry’s growth. By this I mean that each year the industry grows, your competitor’s market share grows as well. What does your competitor’s growth mean relative to your company’s stagnant growth?

A value chain analysis is a tool you can use to define your company’s value assertion. It might just help put you on a level playing field with respect to your competitor’s capabilities, while outlining some inherent flaws in your company’s core competencies.

If you want to read more about the importance of tracking the market’s growth within your own market share calculation, then please read: Importance of Forecasting Market Share in a Growing Market

Common Investor and Trader Blunders

Words of Caution for the Novice

Making mistakes is part of the learning process when it comes to trading or investing. Investors are typically involved in longer-term holdings and will trade in stocks, exchange-traded funds, and other securities. Traders generally buy and sell futures and options, hold those positions for shorter periods, and are involved in a greater number of transactions.

While traders and investors use two different types of trading transactions, they often are guilty of making the same types of mistakes. Some mistakes are more harmful to the investor, and others cause more harm to the trader. Both would do well to remember these common blunders and try to avoid them.

No Trading Plan

Experienced traders get into a trade with a well-defined plan. They know their exact entry and exit points, the amount of capital to invest in the trade and the maximum loss they are willing to take.

Beginner traders may not have a trading plan in place before they commence trading. Even if they have a plan, they may be more prone to stray from the defined plan than would seasoned traders. Novice traders may reverse course altogether. For example, going short after initially buying securities because the share price is declining—only to end up getting whipsawed.

Chasing After Performance

Many investors or traders will select asset classes, strategies, managers, and funds based on a current strong performance. The feeling that «I’m missing out on great returns» has probably led to more bad investment decisions than any other single factor.

If a particular asset class, strategy, or fund has done extremely well for three or four years, we know one thing with certainty: We should have invested three or four years ago. Now, however, the particular cycle that led to this great performance may be nearing its end. The smart money is moving out, and the dumb money is pouring in.

Not Regaining Balance

Rebalancing is the process of returning your portfolio to its target asset allocation as outlined in your investment plan. Rebalancing is difficult because it may force you to sell the asset class that is performing well and buy more of your worst-performing asset class. This contrarian action is very difficult for many novice investors.

However, a portfolio allowed to drift with market returns guarantees that asset classes will be overweighted at market peaks and underweighted at market lows—a formula for poor performance. Rebalance religiously and reap the long-term rewards.

Ignoring Risk Aversion

Do not lose sight of your risk tolerance or your capacity to take on risk. Some investors can’t stomach volatility and the ups and downs associated with the stock market or more speculative trades. Other investors may need secure, regular interest income. These low-risk tolerance investors would be better off investing in the blue-chip stocks of established firms and should stay away from more volatile growth and startup companies shares.

Remember that any investment return comes with a risk. The lowest risk investment available is U.S. Treasury bonds, bills, and notes. From there, various types of investments move up in the risk ladder, and will also offer larger returns to compensate for the higher risk undertaken. If an investment offers very attractive returns, also look at its risk profile and see how much money you could lose if things go wrong. Never invest more than you can afford to lose.

Forgetting Your Time Horizon

Don’t invest without a time horizon in mind. Think about if you will need the funds you are locking up into an investment before entering the trade. Also, determine how long—the time horizon—you have to save up for your retirement, a downpayment on a home, or a college education for your child.

If you are planning to accumulate money to buy a house, that could be more of a medium-term time frame. However, if you are investing to finance a young child’s college education, that is more of a long-term investment. If you are saving for retirement 30 years hence, what the stock market does this year or next shouldn’t be the biggest concern.

Once you understand your horizon, you can find investments that match that profile.

Not Using Stop-Loss Orders

A big sign that you don’t have a trading plan is not using stop-loss orders. Stop orders come in several varieties and can limit losses due to adverse movement in a stock or the market as a whole. These orders will execute automatically once perimeters you set are met.

Tight stop losses generally mean that losses are capped before they become sizeable. However, there is a risk that a stop order on long positions may be implemented at levels below those specified should the security suddenly gap lower—as happened to many investors during the Flash Crash. Even with that thought in mind, the benefits of stop orders far outweigh the risk of stopping out at an unplanned price.

A corollary to this common trading mistake is when a trader cancels a stop order on a losing trade just before it can be triggered because they believe that the price trend will reverse.

Letting Losses Grow

One of the defining characteristics of successful investors and traders is their ability to take a small loss quickly if a trade is not working out and move on to the next trade idea. Unsuccessful traders, on the other hand, can become paralyzed if a trade goes against them. Rather than taking quick action to cap a loss, they may hold on to a losing position in the hope that the trade will eventually work out. A losing trade can tie up trading capital for a long time and may result in mounting losses and severe depletion of capital.

Averaging Down or Up

Averaging down on a long position in a blue-chip stock may work for an investor who has a long investment horizon, but it may be fraught with peril for a trader who is trading volatile and riskier securities. Some of the biggest trading losses in history have occurred because a trader kept adding to a losing position, and was eventually forced to cut the entire position when the magnitude of the loss became untenable. Traders also go short more often than conservative investors and tend toward averaging up, because the security is advancing rather than declining. This is an equally risky move that is another common mistake made by a novice trader.

The Importance of Accepting Losses

Far too often investors fail to accept the simple fact that they are human and prone to making mistakes just as the greatest investors do. Whether you made a stock purchase in haste or one of your long-time big earners has suddenly taken a turn for the worse, the best thing you can do is accept it. The worst thing you can do is let your pride take priority over your pocketbook and hold on to a losing investment. Or worse yet, buy more shares of the stock as it is much cheaper now.

This is a very common mistake, and those who commit it do so by comparing the current share price with the 52-week high of the stock. Many people using this gauge assume that a fallen share price represents a good buy. However, there was a reason behind that drop and price and it is up to you to analyze why the price dropped.

Believing False Buy Signals

Deteriorating fundamentals, the resignation of a chief executive officer (CEO), or increased competition are all possible reasons for a lower stock price. These same reasons also provide good clues to suspect that the stock might not increase anytime soon. A company may be worth less now for fundamental reasons. It is important to always have a critical eye, as a low share price might be a false buy signal.

Avoid buying stocks in the bargain basement. In many instances, there is a strong fundamental reason for a price decline. Do your homework and analyze a stock’s outlook before you invest in it. You want to invest in companies that will experience sustained growth in the future. A company’s future operating performance has nothing to do with the price at which you happened to buy its shares.

Buying With Too Much Margin

Margin — using borrowed money from your broker to purchase securities, usually futures and options. While margin can help you make more money, it can also exaggerate your losses just as much. Make sure you understand how the margin works and when your broker could require you to sell any positions you hold.

The worst thing you can do as a new trader is become carried away with what seems like free money. If you use margin and your investment doesn’t go the way you planned, then you end up with a large debt obligation for nothing. Ask yourself if you would buy stocks with your credit card. Of course, you wouldn’t. Using margin excessively is essentially the same thing, albeit likely at a lower interest rate.

Further, using margin requires you to monitor your positions much more closely. Exaggerated gains and losses that accompany small movements in price can spell disaster. If you don’t have the time or knowledge to keep a close eye on and make decisions about your positions you could experience a margin call. If the value of your positions drop sharply enough then your stock may be automatically sold by the broker to recover any losses you have accrued.

As a new trader use margin sparingly, if at all, and only if you understand all of its aspects and dangers. It can force you to sell all your positions at the bottom, the point at which you should be in the market for the big turnaround.

Running With Leverage

According to a well-known investment cliché, leverage is a double-edged sword because it can boost returns for profitable trades and exacerbate losses on losing trades. Just as anyone would warn you not to run with scissors, you should warn yourself not to rush into using leverage. Beginner traders may get dazzled by the degree of leverage they possess—especially in forex (FX) trading—but may soon discover that excessive leverage can destroy trading capital in a flash. If a leverage ratio of 50:1 is employed—which is not uncommon in retail forex trading—all it takes is a 2% adverse move to wipe out one’s capital. Forex brokers like IG Group must disclose each quarter the percentage of traders that lose money in retail forex customer accounts. For the quarter ending June 30, 2021, 69% of IG Group active non-discretionary trading accounts were unprofitable.

Following the Herd

Another common mistake made by new traders is that they blindly follow the herd; as such, they may either end up paying too much for hot stocks or may initiate short positions in securities that have already plunged and may be on the verge of turning around. While experienced traders follow the dictum of the trend is your friend, they are accustomed to exiting trades when they get too crowded. New traders, however, may stay in a trade long after the smart money has moved out of it. Novice traders may also lack the confidence to take a contrarian approach when required.

Keeping All Your Eggs in One Basket

Diversification is a way to avoid overexposure to any one investment. Having a portfolio made up of multiple investments protects you if one of them loses money. It also helps protect against volatility and extreme price movements in any one investment. Also, when one asset class is underperforming, another asset class may be performing better.

Many studies have proved that most managers and mutual funds underperform their benchmarks. Over the long term, low-cost index funds are typically upper second-quartile performers or better than 65%-to-75% of actively managed funds. Despite all of the evidence in favor of indexing, the desire to invest with active managers remains strong. John Bogle, the founder of Vanguard, says it’s because: «Hope springs eternal. Indexing is sort of dull. It flies in the face of the American way [that] «I can do better.'»

Index all or a large portion (70%-to-80%) of your traditional asset classes. If you can’t resist the excitement of pursuing the next great performer, then set aside about 20%-to-30% of each asset class to allocate to active managers. This may satisfy your desire to pursue outperformance without devastating your portfolio.

Shirking Your Homework

New traders are often guilty of not doing their homework or not conducting adequate research, or due diligence, before initiating a trade. Doing homework is critical because beginning traders do not have the knowledge of seasonal trends, or the timing of data releases, and trading patterns that experienced traders possess. For a new trader, the urgency to make a trade often overwhelms the need for undertaking some research, but this may ultimately result in an expensive lesson.

It is a mistake not to research an investment that interests you. Research helps you understand a financial instrument and know what you are getting into. If you are investing in a stock, for instance, research the company and its business plans. Do not act on the premise that markets are efficient and you can’t make money by identifying good investments. While this is not an easy task, and every other investor has access to the same information as you do, it is possible to identify good investments by doing the research.

Buying Unfounded Tips

Everyone probably makes this mistake at one point or another in their investing career. You may hear your relatives or friends talking about a stock that they heard will get bought out, have killer earnings or soon release a groundbreaking new product. Even if these things are true, they do not necessarily mean that the stock is «the next big thing» and that you should rush into your online brokerage account to place a buy order.

Other unfounded tips come from investment professionals on television and social media who often tout a specific stock as though it’s a must-buy, but really is nothing more than the flavor of the day. These stock tips often don’t pan out and go straight down after you buy them. Remember, buying on media tips is often founded on nothing more than a speculative gamble.

This isn’t to say that you should balk at every stock tip. If one really grabs your attention, the first thing to do is consider the source. The next thing is to do your own homework so that you know what you are buying and why. For example, buying a tech stock with some proprietary technology should be based on whether it’s the right investment for you, not solely on what a mutual fund manager said in a media interview.

Next time you’re tempted to buy based on a hot tip, don’t do so until you’ve got all the facts and are comfortable with the company. Ideally, obtain a second opinion from other investors or unbiased financial advisors.

Watching Too Much Financial TV

There is almost nothing on financial news shows that can help you achieve your goals. There are few newsletters that can provide you with anything of value. Even if there were, how do you identify them in advance?

Not Seeing the Big Picture

For a long-term investor, one of the most important but often overlooked things to do is a qualitative analysis or to look at the big picture. Legendary investor and author Peter Lynch once stated that he found the best investments by looking at his children’s toys and the trends they would take on. The brand name is also very valuable. Think about how almost everyone in the world knows Coke; the financial value of the name alone is therefore measured in the billions of dollars. Whether it’s about iPhones or Big Macs, no one can argue against real life.

So pouring over financial statements or attempting to identify buy and sell opportunities with complex technical analysis may work a great deal of the time, but if the world is changing against your company, sooner or later you will lose. After all, a typewriter company in the late 1980s could have outperformed any company in its industry, but once personal computers started to become commonplace, an investor in typewriters of that era would have done well to assess the bigger picture and pivot away.

Assessing a company from a qualitative standpoint is as important as looking at its sales and earnings. Qualitative analysis is a strategy that is one of the easiest and most effective for evaluating a potential investment.

Trading Multiple Markets

Beginning traders may tend to flit from market to market—that is, from stocks to options to currencies to commodity futures, and so on. Trading multiple markets can be a huge distraction and may prevent the novice trader from gaining the experience necessary to excel in one market.

Forgetting About Uncle Sam

Keep in mind the tax consequences before you invest. You will get a tax break on some investments such as municipal bonds. Before you invest, look at what your return will be after adjusting for tax, taking into account the investment, your tax bracket, and your investment time horizon.

Do not pay more than you need to on trading and brokerage fees. By holding on to your investment and not trading frequently, you will save money on broker fees. Also, shop around and find a broker that doesn’t charge excessive fees so you can keep more of the return you generate from your investment. Investopedia has put together a list of the best discount brokers to make your choice of a broker easier.

The Danger of Over-Confidence

Trading is a very demanding occupation, but the «beginner’s luck» experienced by some novice traders may lead them to believe that trading is the proverbial road to quick riches. Such overconfidence is dangerous as it breeds complacency and encourages excessive risk-taking that may culminate in a trading disaster.

From numerous studies, including Burton Malkiel’s 1995 study entitled: «Returns From Investing In Equity Mutual Funds,» we know that most managers will underperform their benchmarks. We also know that there’s no consistent way to select, in advance, those managers that will outperform. We also know that very few individuals can profitably time the market over the long term. So why are so many investors confident of their abilities to time the market and/or select outperforming managers? Fidelity guru Peter Lynch once observed: «There are no market timers in the Forbes 400.»

Inexperienced Day Trading

If you insist on becoming an active trader, think twice before day trading. Day trading can be a dangerous game and should be attempted only by the most seasoned investors. In addition to investment savvy, a successful day trader may gain an advantage with access to special equipment that is less readily available to the average trader. Did you know that the average day-trading workstation (with software) can cost in the tens of thousands of dollars? You’ll also need a sizable amount of trading money to maintain an efficient day-trading strategy.

Unless you have the expertise, a platform, and access to speedy order execution, think twice before day trading. If you aren’t very good at dealing with risk and stress, there are much better options for an investor who’s looking to build wealth.

Underestimating Your Abilities

Some investors tend to believe that they can never excel at investing because stock market success is reserved for sophisticated investors only. This perception has no truth at all. While any commission-based mutual fund salesmen will probably tell you otherwise, most professional money managers don’t make the grade either, and the vast majority underperform the broad market. With a little time devoted to learning and research, investors can become well-equipped to control their own portfolios and investing decisions, all while being profitable. Remember, much of investing is sticking to common sense and rationality.

Besides having the potential to become sufficiently skillful, individual investors do not face the liquidity challenges and overhead costs of large institutional investors. Any small investor with a sound investment strategy has just as good a chance of beating the market, if not better than the so-called investment gurus. Don’t assume that you are unable to successfully participate in the financial markets simply because you have a day job.

The Bottom Line

If you have the money to invest and are able to avoid these beginner mistakes, you could make your investments pay off, taking you one step closer to your financial goals.

With the stock market’s penchant for producing large gains (and losses), there is no shortage of faulty advice and irrational decision making. As an individual investor, the best thing you can do to pad your portfolio for the long term is to implement a rational investment strategy that you are comfortable with and willing to stick to.

If you are looking to make a big win by betting your money on your gut feelings, try a casino. Take pride in your investment decisions, and in the long run, your portfolio will grow to reflect the soundness of your actions.

What Strategies Do Companies Employ to Increase Market Share?

A company’s market share is the percentage it controls of the total market for its products and services. Market share is an essential metric for businesses because it’s an indicator of a company’s profitability and success. It can signal dominance in an industry and how well a company’s revenue-generating efforts are working to achieve business goals.

Market share can affect operations, pricing of products and services, and, potentially stock market performance. A growing market share corresponds to growing revenue. That, in turn, means a business can scale up its operations and opportunity for greater profitability. To gain market share should be a serious business goal.

There are a number of strategies a company can put to work to increase market share. These include improving innovation, building and solidifying customer loyalty, employing a talented, dedicated workforce, acquiring other companies, deploying effective advertising, and pricing products and services efficiently.

Key Takeaways

How Can Companies Increase Market Share?

Understanding the Benefits of Market Share

A higher market share places companies at a competitive advantage:

Using sales, the formula to determine market share for a specific period of time is (total company revenue/total market revenue) x 100. Using units sold, the formula is (total number of units sold by company/total number of units sold in the industry)/100.

How to Gain Market Share

The importance of market share lies not simply in maintaining your company’s current share of the market. After all, as the industry grows, a company’s market share must grow as well to stay competitive and profitable. Increasing market share is crucial and involves gaining a bigger share than you have already. That would indicate that your growth is greater than average and you’re outperforming your competition.

Here are some areas a company can focus on to increase market share.

Innovation

Innovation that attracts customers can come in different forms. One is useful, new technology that a company develops, introduces, and continues to improve before competitors gain a foothold. Consumers excited about the technology buy it, use it, and can become repeat customers. Innovative technology can build a company’s customer base with consumers new to the industry as well as consumers who leave another company for it.

A few other ideas for innovating to gain market share can include product innovation, production method improvements, and marketing strategies. The potential for high-value innovation exists throughout a company.

Customer Loyalty

Building and reinforcing relationships with existing customers by cultivating their loyalty is a smart strategy to gain market share. First of all, existing customer loyalty can help prevent customers from leaving a company for others when new products come to market. What’s more, a company can broaden its base with the word-of-mouth marketing so often provided by satisfied, happy customers.

Take advantage of chances to engage with customers who desire a closer connection and to deepen their positive experience. An added benefit is that this organic opportunity to welcome new customers and increase market share often can come without specifically related increases in a company’s marketing costs. Plus, loyal customers can sometimes share ideas for innovations to the products they love.

Skilled Workforce

A company that focuses on attracting and keeping talented employees is focused on increasing its market share. That’s because skilled employees can become dedicated employees. That, in turn, can cut expenses related to hiring and training. Plus, a skilled workforce that excels at its tasks can allow a company to maintain its focus on producing exceptional products and sales. Attracting the best requires competitive salaries and a strong selection of benefits, including options for flexible work schedules and relaxed office settings.

Acquisitions

To win market share and dominate an industry, a company can consider buying its competition. Such a move actually offers multiple strategies to increase market share in one action. With an acquisition, a company takes a competitor out of the market and assumes its market share. It captures its customer loyalty. Moreover, it can put products, services, and other strategic opportunities already developed by its acquisition to work immediately. If a company can’t buy another due to financial constraints, it can consider acquiring key employees to improve its own workforce and for the customer loyalty connected to those employees.

Advertising

Effective, frequent advertising offers a good opportunity to gain market share. Innovative branding and marketing through advertising can garner the attention of consumers, build connections with existing customers, and spur widespread desire for the products and services a company offers. High-impact advertising in different forms can help buyers understand and align with a company. No matter which advertising media is used, it’s wise to maintain continuity across design, voice, and message to ensure a strong, positive, and lasting impression. Companies should also make sure that their advertising actually targets the right market segment for their products and services.

Price Reductions

Lowering prices is a solid strategy to help a company win market share. Lower, more attractive prices can attract consumer attention and loyalty. That can increase the all-important sales that drive market share higher. In addition to decreasing the actual price for products, a company can consider promotions, coupons, bonus items, and other customer benefits. For instance, incentives such as referral programs and free shipping can generate extra interest and added sales.

How Can I Improve My Market Position?

One way a company can increase its market share is by improving the way its target market perceives it. This kind of positioning requires clear, sensible communications that impress upon existing and potential customers the identity, vision, and desirability of a company and its products. In addition, you must separate your company from the competition. As you plan such communications, consider these guidelines:

How Can I Attract New Customers?

One way to win market share is to win new customers. A company can increase its customer base in a variety of ways. Here are a few to consider:

How Can I Prevent Loss of Market Share?

To avoid losing its market share, a company should monitor its market share metric, keep an eye on the performance of its competitors, and take steps to improve the aspects of its business that can affect its market share standing. These can include things like product and service quality and pricing, customer satisfaction, the growth of its customer base, marketing, and advertising, the quality of its staff, and the potential for the acquisition of competing companies.

The Bottom Line

Increasing market share can be vitally important to the financial health and continued success of a business. A company has a number of opportunities at hand to, not just maintain, but gain market share. Every company should understand the value a strong market share offers and commit to the ongoing effort that it can take to build it.