Why is it important to increase market share?

Answer 1

It's important to increase market share because you are taking your competitors' customers and making them your own, you are also bringing in more money for the business and have the bragging rights that you are the best-seller in that industry.

Answer 2

Economies of Scale: As a company's market share increases, it can operate on a greater scale and increase profitability due to economies of scale.

Cost Advantage: An increase in market share can help a company develop a cost advantage compared to its competitors.

Boost in Sales: An increase in market share helps boost a company's total sales, as consumers are driven to purchase a product when they notice the brand loyalty of a majority of their peers.

Widening Customer Base: An increase in market share helps a company widen its customer base, as a majority of the consumer base is loyal towards one brand or product, and the rest may also follow.

Enhancing Reputation: An increase in market share helps enhance the reputation of a company, which in turn helps boost sales and broaden the customer base.

Competitiveness: Market share is a key indicator of a company's competitiveness, and increasing market share can improve profitability.

ROI: As market share increases, a business is likely to have a higher profit margin, a declining purchases-to-sales ratio, a decline in marketing costs as a percentage of sales, higher quality, and higher priced products.

To increase market share, companies can employ various strategies such as offering innovative technology, strengthening customer loyalty, hiring talented employees, acquiring competitors, lowering prices, using advertising, or introducing new or different products.

By increasing market share, companies can improve their profitability, competitiveness, and reputation, and widen their customer base.