Market share

A business's market share is the proportion of the whole market it serves, measured as a percentage. If you sell one in every ten items bought in a market, your market share is 10%. It is not the same as sales: sales are the amount you sell, while market share compares that amount with the whole market, including every rival.

A market share aim

A market share aim means increasing the business's percentage of the total market. It is a financial aim, because it is about the business's position in its market and is calculated from sales data. An owner might turn it into an objective such as “raise our share of the city's cinema market from 12.5% to 17.5% within a year” — specific and measurable, so progress can be checked.

For example, three cinemas in a city sell 48,000 tickets a year between them. The Rio sells 6,000 of them, so its market share is 12.5% (6,000 ÷ 48,000 × 100). If the Rio sells 2,400 more tickets next year while the market stays at 48,000, its share rises to 17.5%.

Why aim for this? If the total market stays the same size, a rising share means the business is winning customers from rivals and becoming stronger in its market. That can bring in more revenue and make it harder for competitors to win customers back. To get there, an owner may cut prices, advertise more or improve service — spending money now to build a bigger position later. Sales can still grow while market share falls, if the whole market grows faster than the business does.