A Guide to Expanding Your Market Share

A Guide to Expanding Your Market Share

Market share is a key indicator of a company’s success and profitability in the business world. Businesses with a larger market share enjoy several advantages including lower production costs and easier access to investors. As a result, businesses continuously search for ways to expand their market share since an increase in market share implies higher revenues. In this article, we will explore easy ways to expand market share that can be applied by businesses across various industries.

   

Benefits of Increasing Market Share

The value of market share is obtained by dividing the company’s total revenue by the total industry revenue. By calculating market share, businesses can understand their position in the industry and assess their competitors’ positions.

A broad market share offers several benefits to businesses, including:

  • Businesses with a significant market share often secure the best prices from suppliers as they need to order materials in larger quantities to meet high demand.
  • Increasing market share leads to increased production of goods or products, thus reducing production costs per unit for the business.
  • A high market share can boost company sales and simultaneously encourage existing loyal customers to buy more products from the company.

Simple Steps to Increase Market Share

Here are some easy ways in which businesses can expand their market share:

Build customer loyalty

The initial step businesses can take is to foster consumer loyalty. Research conducted by Emarsys indicates that 20% of loyal consumers can generate 80% of profits for the company. 

This data underscores the significance of ensuring consumer satisfaction and contentment. Happy consumers are inclined to repurchase products from the company and may also recommend them to others, consequently boosting sales.

Businesses can enhance consumer loyalty by refining their products and services, delivering superior customer service, and implementing loyalty programs. Through these measures, businesses can effectively expand their market share.

Acquire other companies

Acquiring competing companies is another method to increase market share. This allows the acquiring business to transfer the market share and loyal consumer base of the acquired company to its own. 

For example, if Supermarket A operates mainly in Sumatra but wants to expand its presence in Java, it could consider acquiring the leading store chain in that region.

In situations where a business lacks the funds to acquire another company, it may choose to hire key employees from its competitors. These employees can contribute to innovation, the development of superior products and services, and an increase in sales.

Penetrate new markets

Expanding into new markets can help businesses increase their market share. This can involve establishing a presence in a new location or repositioning products or services to target a different demographic.

Expanding into new markets gives businesses the opportunity to grow their operations, increase revenue, and reach a wider consumer base. 

However, it is important to conduct thorough market research before entering a new market. Businesses need to assess various risks such as natural disasters, cultural differences, and other potential challenges that may arise.

Lower selling prices

The last methods that businesses can use to attract customers is to lower the prices of their products or services. This approach is called price penetration and can be useful to gain an initial market share for new products.

However, it’s important to keep in mind that this strategy is only effective in the short term. 

When businesses increase prices to their normal levels, there is a high possibility of losing consumers. Moreover, customers might perceive the company’s products as low quality, leading to a negative image of the brand.

Simplify Store Expansion with LOKASI Intelligence

Businesses planning to expand their market share by opening stores in new locations can use LOKASI Intelligence to make the process easier. 

LOKASI Intelligence is a geospatial analytics and location intelligence platform that provides recommendations within minutes. The platform uses demographic data, socioeconomic status, mobile data, points of interest, accessibility, and other data to evaluate competitors and potential sales for businesses in new locations. 

With LOKASI Intelligence, businesses can make informed decisions without spending a lot of money and effort on surveys and location searches.

Learn more about how LOKASI Intelligence can help businesses by contacting email: sales@bvarta.com or WA: 087779077750

FAQ

How to Increase Market Share?

To increase market share, businesses can employ various methods such as building customer loyalty, making acquisitions, entering new markets, and lowering product prices.

What does expanding market share mean?

Expanding market share can involve growing the company itself; the larger the market share, the greater the revenue generated. This is driven by increased consumer demand for the product.

What’s the goal of expanding market reach?

The goal of broadening market reach is to boost revenue. This is because companies with a wide market share benefit from several advantages, including lower production costs and enhanced accessibility to investors.

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