Do you know the share of market definition? Knowing and understanding your business’s market share is important for many different reasons. 

You need to know how big your slice of the pie is to plan for growth and to understand what type of customer you need to attract.

The share of the market can also be used to calculate your trade percentage and what your competition is doing. 

This article will explain what share of the market means and look into the different types of market shares.

It will also cover how you can increase your share with digital marketing. 

Share of Market Definition: What Is Market Share?

Pie chart showing a company's market share

A company’s market share is the percentage of products sold by that company in a particular category. It refers to how much space the business occupies in a given market.

Hence, if a company sells 20% of all bikes in the bike market, it has a 20% industry share. In most cases, market share is measured once a year or on a quarterly basis.

Of course, most companies keep track of their sales and know how many sales they make in a particular sector or category.

Despite that, they may not have an idea what their total market share is. Why? Because such information (on total sales in a given industry) is only gathered and announced by: 

  • Industry associations, 
  • The government, or 
  • Regulatory agents.

Some regulatory agencies and industry associations gather this data yearly or quarterly. The government collects it every four years.

In some sectors, it is next to impossible to determine and quantify total market share. Power generation, for instance, is an industry sector in which it’s impossible to collect total sales. 

How Does Market Share Benefit a Business

A brand’s market share is one of the most reliable metrics for measuring success. It shows how you measure up against competitors and reveals trends and possible threats.

In addition, it provides a benchmark for determining the impact on business results.

Companies use market share in a variety of different ways. For one, they use it to attract analysts, investors, and fresh capital. 

Many investors and analysts already track the sales share of businesses they are interested in. Why? Because a larger slice of the pie indicates a more competitive business. 

In most cases, a company that is gradually growing its industry share is growing at a faster pace than its competitors. As such, it becomes more attractive to investors.

A larger market share also allows firms to expand their operations and increase profitability. Companies employ various tactics to expand their industry trade share, including:

  • Increased advertising, 
  • Lowered prices, or 
  • Introduction of new products or services. 

What Is the Overall Impact of Market Share

Market share can have a profound impact on businesses, especially on those operating in industries that allow little to no growth. It is typically most impactful in cyclical industries and can have a devastating effect on companies with smaller shares.

In industries with higher growth rates (growth industries), market share has less of an impact because it is in a state of constant flux.

Economic factors can affect market share by influencing margins, earnings, and sales. In most cases, a company with higher earnings and sales has a greater share in its industry.

Types of Market Share

Market shares can be quantified either by value or by volume. An organization’s value market share is based on its share of total segment sales. 

In this context, volumes refer to the number of units a company sells out of the total number of units sold in that particular industry. 

Typically, there is no linear relationship between value and volume market share. This means a unit can have a high market share value but low volume numbers.

In such a case, its value market share would be high, and its volume share low.

A value market share comparison is common in industries such as FMCG, where most products are of high volume and low value.

How Do I Calculate Market Share In an Industry?

The following formula is used to calculate a company’s share of market:

  • Determine the time period for which the data will be examined. This may be a year or quarter.
  • Calculate the company’s sales for that time period.
  • Determine the total number of sales within your company’s industry.
  • Divide your business’ total sales by its industry’s total sales.

For example, let’s say your firm sold $20 million in product during a quarter in an industry that sold a total of $100 million in that same product.

In that case, your company’s market share for that particular product would be 20% ($20 million divided by $100 = 0.20 or 20%).

How to Grow Your Market Share Using Digital Marketing? 

An artist's impression of a company's share of market

There are multiple ways that digital marketing can be used to increase market share. Here are a few of the best:

Know Your Competition 

You won’t be able to increase your share in any given industry unless you fully understand that particular industry. This includes studying your competitors and measuring how you compare to them. 

The fact is, researching your competition can help you understand consumer preferences and habits. Study the strategies and channels your competition uses to attract new customers and identify market gaps. 

  • Which channels are they using?
  • How does their content strategy work?
  • Are they running online/offline paid campaigns?
  • What are their USPs (do you know what is a USP)?

Answering these questions that relate to your own digital strategies can help you learn more about your target audience. That, in turn, will allow you to make educated decisions and gain a competitive advantage.

Using a tool like Competitive Analysis Templates will allow you to gauge your sector ownership more accurately.

With it, you’ll be able to pinpoint the efforts that are worth pursuing and how to work towards increasing your share in your niche. 

You can also get an insight into your competitors’ social media activities and channels using Similarweb

This tool will give you a detailed overview of your competitors’ website traffic coming from their social media channels. 

For instance, electronics giant Samsung has a strong exposure on YouTube:

An image depicting Samsung’s social media traffic distribution

Their channel features product announcements, tutorials, and types of video content that attract interest. 

However, note that Samsung also runs an affiliate program. It “rewards” those who feature Samsung products in their video content and post affiliate links to the Samsung website.

Samsung’s rival Apple has a larger presence on Twitter:

An image depicting Apple’s social media traffic distribution

Keeping tabs on your competitors can help you optimize your own marketing strategies. Find out which channels work best for them and use that information to grow your share. 

Work on Customer Acquisition 

The modern buyer’s experience is highly fragmented and consists of a growing number of touchpoints. Brands need to engage customers to create that winning buzz that influences buying decisions.

Apple is a great example of how a company can take advantage of user-generated content to reach new customers online and boost engagement.

Remember that Shot on iPhone challenge that called users to share the best photo taken with an iPhone? 

Apple took the best images and displayed them in Apple stores, on billboards, and online. That campaign not only highlighted the quality of their camera but also generated a huge user engagement. 

Of course, there are many other things you can try to acquire new customers and boost online sales. 

Take Pepsi’s campaign as an example. launched in late 2020, during the lockdown in the Netherlands. 

As part of the campaign, products nearing their expiration date were packed together and were delivered directly to shoppers. 

The initiative encouraged customers to try different products at lower prices and exploited consumer preference for waste reduction. 

Don’t Forget Your Existing Customers 

Your current customer base is basically your current market share. To grow it sustainably, you have to keep your existing customer base and gradually add to it. 

Nowadays, consumers wield greater power than ever before. This is because as consumers, we are spoiled with nearly unlimited access to choices and information. 

In order to reduce customer churn and keep your existing base happy, you need access to data and the right software to use it.

An email automation tool like Mailvio can help you nurture customer relationships and provide personalized customer experience. 

Mailvio is an email automation tool designed to provide a personalized customer experience

For example, you can use Mailvio to send follow-up emails to customers who have completed a purchase. This is a popular method for boosting customer engagement and achieving repeat sales. 

According to Epsilon, 80% of shoppers are more likely to buy from a business that offers a personalized experience. 

Moreover, a well-written survey can also boost customer loyalty and customer retention. It can also help improve your product or service, and thus, increase your commercial footprint. Read this article to learn how to write a compelling subject line for survey emails.

Netflix is an excellent example of a company with successful customer retention initiatives. 

When it comes to customer retention, it outperforms its competitors in the streaming sector time and again. Why? Because it constantly tightens up its content recommendation algorithm to cater to its consumers’ needs. 

Numbers suggest that two-thirds of its new subscribers still use the service a year after they’ve signed up. 

Embrace Innovation 

If a company fails to innovate and evolve, it is doomed to fade away in today’s dynamic marketplace. 

Think of Sony and its PlayStation, which holds a whopping 92.24% of the gaming console revenue slice. Sony has been constantly evolving its flagship console since 1994, ensuring faster growth than its competition. 

Other console makers at the time failed to keep up with innovation and slipped into obscurity (RIP, good old Atari consoles).

The point is, you constantly need to innovate to increase your industry presence. Consumers do tend to cling to their favorite brands, but only to a point. 

When a product or service appears that it is superior to that of their favorite brand, they won’t hesitate to make the switch. 

Apple is an excellent example of a company that embraces innovation as part of its USP. The iPhone has been around since 2007, and Apple has been working tirelessly to improve the package with each subsequent model.

Consequently, the number of iPhone users spiked from 11 million in 2008 to 1 billion in 2020

Of course, innovation doesn’t necessarily mean introducing new products. For instance, you can try and use “social listening” to learn more about how customers see your brand in relation to the competition.

You can then use that insight to develop and launch marketing campaigns powered by emerging consumer trends. 

Target Smaller Audience Segments

Breaking down your target audience into smaller segments can certainly increase your industry presence. Email targeting is a great way for you to achieve online success.

With Mailvio, you can separate your entire email list into smaller segments based on:

  • Customer behavior, 
  • Geolocation, 
  • Gender
  • Purchase history, etc. 

This data allows you to identify buyer habits and buyer personas that are already using or are interested in using your products.

The fact is, machine learning accelerates the process of discovering audience segments. The more detailed your analysis, the clearer you’ll see how your products or services appeal to such niche audiences. 

Proctor & Gamble is a great example of how audience discovery and niche segmentation can boost ROI of marketing campaigns. 

It leverages the customer IDs of its billion consumers to establish targeted audiences for marketing. 

Using granular segmentation, it is able to identify accurate buyer personas and craft highly relevant content and messaging. 


Customer retention and customer acquisition are the two bulletproof ways to grow your market share. That is, if we exclude the possibility of buying out a competitor. 

So, how to increase your slice of the pie organically? By scanning your competitors’ tactics and leveraging the power of digital marketing.

The bottom line is that you need to evolve and adapt to the changing digital landscape.

The future of marketing is digital. The era of advertising is shifting towards a more customer-centric approach. 

And if you want to see your brand thrive in today’s dynamic marketplace, you need to change with the times.

To learn more about digital marketing, please visit our blog

Neil Napier

Neil Napier is the co-founder of Mailvio. Neil started his entrepreneurial journey in 2012 out of necessity to keep his visa in the UK, when he failed to keep his visa he moved to Finland and started his career as a serial entrepreneur and super affiliate. With over $10 million USD in revenue generated, he is a sought-after expert entrepreneur, copywriter & product creator.

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