The market share occupied by this. Market share is a marketing indicator: evaluation and analysis. Market segmentation. Market share analysis

Market share is a traditional tool with which you can evaluate the performance of any enterprise, as well as predict further development prospects. This indicator shows what place the company occupies in the relevant market segment relative to its competitors.

It is worth noting that a quantitative display of market share can be obtained by calculating the percentage of sales volume to general indicators sales volumes of products that belong to the same group.

Market share reflects how effective marketing activities are conducted by the company. It should be noted that at the moment there is no universal method, unanimously adopted in the world economy, that allows to measure this indicator in a perfect way. The company's share can be calculated not only in the market, but also for a separate service segment, that is, that part of the market volume for which many companies are actively competing.

If the total sales in the corresponding market segment cannot be calculated, then share can be determined in relation to parameters such as:

Sales of nearest competing firms.
Market segment leader or leading competitor.

What are the ways to calculate market share?

There are several effective ways, with the help of which you can correctly determine the share, namely:

in kind

The indicator is the number of commodity units that are sold by a certain enterprise as a percentage of the total market sales, which are expressed in the same units. In this case, you should use the following formula:

Market Share=Percentage Unit Sales/Amount of the same sales made in the market.

In value terms

The indicator in sales volumes differs from the first method by reflecting the cost at which products are sold. In this case, the calculation formula will look like this:

Market share=Sales in currency/Total sales in the market segment.

Through brand consumption intensity

This method is also known as the P&C technique. To use the methodology of Parfitt and Collins, it is necessary to use information from panel surveys, which are conducted on the basis of a regular sample of real buyers. It is worth noting that the calculations are carried out as a percentage, and the formula looks like this:

Brand market share= Brand penetration * Brand repurchase * Brand consumption intensity.

Brand penetration is the percentage of consumers who purchase a brand at least once out of all consumers who make a purchase of the product to which the company belongs.

Repeat purchase reflects how committed consumers are to a brand. This indicator is calculated as the percentage of brand acquisitions that consumers have purchased more than once during a specified period of time.

Brand consumption intensity refers to the ratio of the average purchases of a company's products by repeat customers to the average consumption of all product groups represented in a particular category.

What are the goals of conducting a market share analysis?

Share analysis is carried out to determine two goals, in particular:

The effectiveness of the fight in competitive environment.
Advantages in a competitive environment.

It is worth noting that small market segmentation is most often used to determine the first goal. In this case, it is necessary to analyze each segment, including territory, group, product category. In turn, to determine competitive advantage segments that are more aggregated should be applied. This will allow you to better understand the competitive capabilities of the company as a whole in the market.

How can you collect information about a particular market?

In order to correctly calculate market share, it is necessary to collect relevant data. It is worth considering that collecting detailed information on the market segment is a rather difficult task. There are a number of sources from which data can be obtained, in particular:

State statistics.
Manufacturers Associations.
Retail chains.
Independent research and analytical agencies.

It is recommended not to dwell on one of them, but rather to collect available information from several sources. Then you should compare it, because only in this way can you correctly assess the state of the market.

The information basis for calculating the market share of a product of a certain brand (for simplicity, the market share of a certain brand) is the sales volume of competing products. Thus, market share is a calculated indicator, except when it is determined by an expert method by asking experts direct questions about their opinion on the value of this indicator for individual products.

Typically, the sales volume for calculating the market share indicator is expressed in monetary units. However, to exclude the influence of prices on this indicator, it is possible, where appropriate, to use natural indicators, for example, the number of cars sold of certain brands.

To determine the market share of a product of a certain brand (a certain assortment position of a product group), both primary and secondary data should be used. Primary data is collected and processed using the following main methods.

1. Trade audit – determination of the share of sales of various products based on sales data of a representative sample of sales points - wholesale and retail outlets.

Obviously, various outlets can be classified according to their location, type, sales volume, etc. The sample should represent different types of outlets. To form a sample, it is necessary to have a complete database of outlets. Only in this case, it becomes possible to project the obtained data on the entire studied market (market segment). Data is collected on the volume of sales of the studied products of competing companies.

Trade audit is typically performed by large research agencies with extensive data collection and analysis resources and mature research technology. Such studies cost tens and even hundreds of thousands of dollars, so they can be afforded mainly large companies, most often global producers of food and consumer goods.

Trade audit is carried out in the following sequence.

First, a complete census (sensus) of the trade network of the study area is carried out. The census includes any retail outlets that have the studied goods in stock, ready for sale. As a result of the sensation, we obtain a complete description of the general population under study - the number of outlets, their classification and distribution.

Further, a sample is made from the entire trading network, a so-called statistical panel is formed. Panel - these are the outlets where sales of the product under study will be recorded. The panel is divided into sub-samples, consisting of different types of outlets. You should first agree with the management of outlets about the possibility of the presence of an auditor and the collection of information. The auditor works directly at the point of sale and keeps a description of all goods of the category under study, located both in trading floor as well as in stock. The audit is carried out cyclically. Each audit cycle reflects sales over a specific period of time.

All collected data is entered into databases. For each brand of product and for different product groups, sales volumes and market share indicators are calculated.

Let be the total sales volumes for each competing product (A, B, C, ..., N) of a certain category in the studied outlets included in the sample, presented in monetary units for the selected period of time, and - the total sales volume of "our" product. Then the market share of product A for a sample of outlets - PDA is calculated as follows:

(6)

Similarly, the market shares of all the products studied in our example are calculated:

It's obvious that .

It is possible to cover not all competing products of the studied category, but only the products of the main competitors. In this case, the calculation of the market share indicator is carried out only for the main competitors. Let the market share of "our" product and two products of the main competitors be investigated. Then

This indicator does not give a picture as a whole for the market (the figure of 100% refers only to the studied products, and not to the totality of competing products presented in retail outlets).

The sales volume for a sample of retail stores can be determined based on a regular Nielsen trading panel, which gives a view of all retailers in a particular industry. Based on measurements on the trading panel, the Nielsen index is calculated, which determines the volume of sales by product, brand for a certain period of time (usually two months). The Nielsen index characterizes the average sales volume in one sample store for a certain period of time:

(8)

where V- sales volume for the selected period of time; - stocks at the beginning of the period; P - deliveries; B - return; - inventory at the end of the period.

The market share indicator is calculated using the above formulas.

Market share can also be determined using indicators such as numerical weighted distribution, selection indicator, average share in turnover.

Numerical distribution(PR) is the ratio of the number retail stores, in which a given brand of product is presented, to the total number of a particular type of stores where the consumer usually buys this type of product, expressed as a percentage.

PR = number of brand retailers Product X / total number of product retailers X (%).

Weighted Distribution(BP) is the market share of products held by retailers with Y brand of this product.

VR = total product sales X retailers who sell the brand Y/total product sales X (%).

A weighted distribution takes into account the size of stores that carry a particular product. For example, a weighted distribution of 60% of brand Y product X means that the Y brand is represented in stores that provide a total of 60% of the product's sales volume x.

Selection indicator(IV) = VR / PR = average product sales X in stores selling the Y brand / average sales of products for all retailers. A VR of 60% and a PR of 20% mean above-average sized stores are selected (they are few, but they produce the bulk of the product's sales). The selection indicator in this case is greater than one, namely 60/20 = 3.

Average share in turnover(DM) shows what position a particular brand occupies in selected stores, and can be considered as the market share of brand Y in the total turnover of product X in selected stores.

SD = brand turnover Y product X in selected stores / total turnover of products in selected stores (%).

Then the market share (SR) is defined as MR = PR IV SD = VR SD.

2. Diary consumer panel of regular respondents.

Respondents use a diary (records + checks and receipts) to record all purchases of the product group under study. The data obtained on the basis of the above calculated dependencies are translated by the researcher into market shares. Diary entries are used by many companies in different countries. As a rule, such panels are balanced in terms of family size, age of the head of the family, family income and geography. Panel members are selected quarterly and added to the active roster after receiving a report from them that meets the standards of the research company. For participation in the panel, its participants are stimulated. A family may be excluded from the panel upon application or simply by failing to send three reports in a row. In Russia, this method is beginning to be mastered by some large marketing companies in Moscow, but in the regions it is still very rare.

3. The scanner-panel is similar to the previous method, except for the method of fixing purchases.

In this case, the respondents are given an identification card (or the respondent's credit card is used). A person presents (uses) a card when paying for purchases in a store that has a barcode scanner. The respondent code is appended to the data read by the scanner. Unlike the first method, the scanner-panel allows you to evaluate sales within various segments consumer market. But this method is applicable only in countries with a very high degree of trade automation - it is necessary that almost all purchases be made in stores equipped with scanners.

4. Based on panel surveys, primarily for consumer products (both frequent consumption, such as food, and durable products, such as televisions), the market share of products of a certain brand can be calculated using the Parfitt-Collins method using the formula

where DR is the market share of the brand; PR - brand penetration, characterized by the percentage of buyers of this brand from the total number of buyers who purchase products of the category to which this brand belongs at least once during a certain period of time; PP - re-acquisition (substitution) of the brand, determined by the percentage of buyers who make

repeated purchases of a product of this brand. This is the percentage of consumers who have become adherents of this brand; I – brand consumption intensity – the ratio of the volume of consumption of this brand by repeat buyers (brand adherents) to the average level of consumption of this category of products.

When applying this method, all products are divided into two categories - durable goods (demand is calculated per household) and non-durable goods (demand is calculated per consumer). Brand penetration for both groups characterizes the group of consumers who purchased the product for the first time. Repurchase, which characterizes secondary demand, for non-durable goods means that the consumer continues to buy the product of this brand, i.e. remains a fan of hers. For durable goods, secondary demand refers to a return to a given brand of product when a product is replaced or when an additional purchase is made. This method directly related to consumer research (bottom-up approach).

Suppose there are 10 buyers and competing products in the market X, Y, Z(Table 3.2).

Table 3.2. Market share calculation

Buyers	Penetration	Reacquisition
		XXXX
		XXXX

Brand penetration value X accounts for 40%, reacquisition 66% (8:12). The consumption intensity of the brand is calculated as I = 3: 1.8 = 1.67, where the number 3 characterizes the ratio of the amount of the product X(the sum of initial and repeated purchases) to the number of buyers who bought this product (12: 4 = 3). The number 1.8, which characterizes the average level of consumption of this category of products, is calculated in a similar way for all buyers of all studied products (18:10 = 1.8).

Market share is calculated using formula (1) as DR = 0.4 0.66 1.67 = 44% (check: DR = 8/18, column "Reacquisition").

5. Survey of consumers (physical and legal entities) is carried out at the place of residence of the respondent, in in public places, in the workplace, or in any other setting that involves personal contact.

Respondents are directly asked what products and how often and in what quantity they buy.

To determine the market share of consumer products of daily demand, the following structure of the questionnaire can be proposed (Table 3.3).

Table 3.3. Questionnaire structure

The product of these answers to three questions (O P Q) by the number of buyers of each product - P characterizes the sales volume of competing products for the study period.

For fast-dispensing, systematically purchased products for which there are certain consumption rates (for example, 2 g of toothpaste for one brushing), it is sufficient to determine consumer loyalty to a certain brand and the frequency of toothbrushing on the basis of a survey.

The same applies to calculating the sales volume of category products. B2B, having spending standards, for example Supplies, tools, etc.

6. When the number of analyzed products is relatively large (more than 7–10), the method of paired comparisons is used (this method is discussed in the works). To conduct a market share analysis based on paired comparisons, you need to:
1) make all possible pairs of the studied products and prepare questionnaires for pairwise comparisons;
2) using these questionnaires to conduct a survey of consumers (representatives of the consumer or business market, depending on the object of study). Respondents are asked to compare in pairs with each other products of the same type supplied to the market under study. At the same time, the questionnaire questions can be formulated, for example, as follows: "If you had to choose product A or product B when buying, which one would you prefer?" Possible answers: "Product A", "Product B", "Products are equivalent";
3) based on the data obtained, evaluate the market shares of products of competing companies.

Assuming that steps 1) and 2) have already been completed, we will show how, based on the results of pairwise comparisons, we can estimate the market share of each competing product.

Let's consider a hypothetical example. Let the respondents express their attitude to five competing brands A, B, C, D, E (Table 3.4).

Table 3.4. Determination of market share based on pairwise comparisons

The numbers at the intersection of, for example, the first row A and the second column B (0.61) represent the proportion of cases where brand A is preferred over brand B. Obviously, at the intersection of the second row and the first column there should be a number that complements the previous share to one (0.39). If the respondent finds it difficult to choose the preferred trade mark, then the numbers 0.5 are entered into the table.

It is easy to check that the sum of all preferences in the example is equal to 10, the number of pairs being evaluated. Dividing the total preferences of each brand by the sum of all preferences characterizes the calculated value of the market share indicator for products of a particular brand.

7. Determination of market share indicators based on expert assessments.

It is carried out by direct processing and analysis of expert judgments, which can be employees of marketing departments of organizations, retail stores, as well as employees of consulting firms, marketing centers, marketing specialists, etc. involved from outside.

In addition to primary data, in the case when the market share is studied for enlarged assortment positions, and the market tends to an oligopolistic structure (oil, gas, metals, mineral fertilizers etc.), which is typical for products B2B, it is possible to use secondary data obtained from Russian and international statistical collections.

8. Use of marketing intelligence data, which can be carried out in various directions.

Having data on labor productivity in the industry and the number of workers employed in the production of major competitors, and assuming that all output is sold, it is possible to estimate the production volumes of competitors by multiplying labor productivity by the number of workers.

Knowing the costs of any type of resources (raw materials, electricity, gas, etc.) for the production of a unit of output and the volume of purchases of resources by competitors, it is possible to estimate the production volumes of competitors by dividing the volume of resources by the cost of resources for the production of a unit of output.

Knowing the average waste output per unit of production and the volumes of industrial waste of competitors, it is possible to calculate the volume of production of competitors by dividing the volume of industrial waste by the waste output per unit of product.

In the case of an industrial market, where there are few sellers, few buyers, and each purchase is expensive, the size of the market can be calculated by directly adding up the data on projects announced by competitors. Enterprises operating in such markets, as a rule, publish information about their projects in the press and on the Internet (since there are few projects, they tend to tell about each one, at least on their own website). Thus, by monitoring the press, competitive and thematic Internet sites, it is possible to collect very accurate information about all projects in this industry for the reporting period.

Often, a company has access to specific data, which can be used to accurately determine the size of the market. For example, when selling, all POS terminals must be affixed with a special stamp certifying that this type of POS terminal is approved for operation by the Federal Tax Service of the Russian Federation. It is also known that the right to manufacture and sell such stamps belongs to only one organization. If you can get information from this organization about how many stamps were sold in a year, then by multiplying the number of stamps by the average cost of a cash terminal, you can get the market size and your share in it (according to your own sales).

When using publicly available data, one must keep in mind that they can be very inaccurate. Majority Russian companies does not provide accurate information about the volume of products produced or sold and will try to circumvent existing rules(no matter what it concerns - customs, accounting or something else).

Obviously, the use various methods definitions of market share will give different results. In this case, it is necessary either to give preference to the most reliable method, or to use the average value of the market share indicator.

Market share characterizes the position of the company in the market relative to competitors. The quantitative indicator of market share is determined by the percentage ratio of sales volume indicators to the total sales volume of goods of the same category in the market.

Although the market share is the most important indicator marketing activities company, there is no universally accepted perfect method for measuring it. The company's share can be calculated both on the market as a whole and within a separate serviced segment. Segment served - part of the total market for which competitive fight. In a situation where the volume of sales in the market as a whole is unknown, the share is determined relative to:

regarding sales of a number of closest competitors;
relative to the market leader, leading competitor.

Market share can be determined in two ways:

in kind;
in value terms.

Market share in real terms (in unit terms) - number of units sold specific company as a percentage of total market sales, expressed in the same units.

Market share by piece = Piece sales (quantity)
sales (%) Volume of unit sales in the entire market (number)

This formula can, of course, be modified to output either unit sales or total market unit sales for the other two variables, as shown below:

Unit Sales = Unit Sales Market Share (%) * Unit Sales Total Market

Market share in value terms (in sales volumes). Market share by sales volume differs from unit market share in that it reflects the prices at which goods are sold. In fact, relatively in a simple way Relative price calculation is the division of the market share by sales volume by the market share by unit sales.

Market share by volume =Sales volume (rub)
sales (%) Total sales in the market

Market share through brand consumption intensity known as Parfitt and Collins technique (P&C methodology). For the calculation, data from panel surveys (i.e., studies conducted on a constant sample of consumers) are used. The following calculation formula is applied (in %):

Brand Market Share = Brand Penetration * Brand Reacquisition * Brand Consumption Intensity.

brand penetration to the market is defined as the percentage of buyers of a given brand (who made a purchase at least once) of the total number of buyers who purchase goods to which this brand belongs in a certain period. Reacquisition of a brand characterizes the loyalty of consumers to this brand. It is defined as the percentage I of repeated purchases made by buyers for a certain period of those who have already purchased this brand at least once. brand consumption intensity is calculated as the ratio of the average amount of consumption of a given brand of repeat buyers to the average amount of consumption by all groups in this category of goods.

marketing coordinator
department of electrotechnical
and telecommunication systems,
ZM Russia, Moscow

Determining the volume and market share is one of the main tasks of a marketer.

There are three components to this task:

The market volume is usually understood as the total cost of all goods of a given group sold to consumers of the market under study for a certain period of time.

Market share is the percentage of products with a certain brand name. Based on the regular measurement of the market share, it is possible to assess how the company's market positions are changing, how effective its marketing efforts are.

Market potential is the maximum size of the market with the greatest marketing activity of all companies in this industry sector of the market, under a certain state of the marketing environment. This is a theoretically calculated value, which is never achieved in reality.

Market potential plays important role when compared to the current market size. Based on this comparison, there is clarity regarding the possible expansion of the market. And these opportunities are one of the main indicators of market attractiveness when making decisions on entering this market.

Methods for determining the size of the market may vary depending on:

Before determining the size of the market, you need to clearly understand what exactly we mean by this market - to outline the boundaries. This includes specifying the following parameters:

It can be one city, a specific region or several regions, all of Russia, etc. At the same time, if the market is heterogeneous and is divided into segments, the market volume must be determined for each segment separately. The scores obtained are then summed up.

For example, if we are researching the coffee market, then we need to clarify what types of coffee we are considering - instant coffee, ground coffee, coffee beans, coffee drinks, etc.

This article will show the methods for estimating the size of the market, which are most often used by Russian companies.

Methods for determining the size of the market can be divided into statistical, indirect and direct accounting methods.

Statistical methods for determining the size of the market based on primary data

To measure the volume of the consumer market, statistical methods are used based on:
1) retail audit;
2) a survey of consumers based on a statistical sample.

Retail Audit is a measure of the flow of goods from a producer to a consumer through a retail network. The method is based on the assumption that the entire volume of the consumed product was purchased in stores, therefore, fixing and summing up the number of sales of all stores (as well as markets, kiosks and other types of outlets), we will get the market volume of this product.

Retail audit allows you to determine:

Retail audits are carried out by large research agencies with extensive data collection and analysis resources and mature research technology. Agencies are the most popular in Russia AC Nielsen, MEMRB,"Business analytics". Such studies cost tens and even hundreds of thousands of dollars, so they can be afforded mainly by large companies, most often global manufacturers of food and consumer goods.

The retail audit is as follows:

1. The Agency makes a complete census (sensus) of the trade network of the study area.

The census includes any retail outlets that have the studied goods in stock, ready for sale. The census usually takes into account the specific features of each outlet: its type, location, selling area, assortment, number cash registers, number of sales staff, etc.

To take into account the dynamics of the trading network, the sensor data is constantly updated.

As a result of the sensation, we get a complete description of the general population under study - the number of outlets, their classification and distribution.

Panels are those stores where sales of the researched product will be recorded. The Agency agrees in advance with them on the possibility of the presence of its auditors and the collection of information.

The panel retains all the properties of the general population and is compiled taking into account the proportional importance of individual trading channels or regions for the entire market. The panel is divided into sub-samples, consisting of different types of outlets. Each subsample has its own extrapolation factor to display the entire trading network. The data collected from the panel is extrapolated to the entire trading network to display the situation in the entire market.

The panel is permanent, except in cases of major changes in the city's sensus. Outlets that for various reasons drop out of the trading network are replaced with equivalent ones.

3. Data collection.

Data collection is carried out by marketing auditors. The auditor works directly at the point of sale and keeps a description of all the goods of the category under study, located both on the trading floor and in the warehouse. The audit is carried out cyclically. Each audit cycle reflects sales over a two-month period.

During the audit process, for each unit of goods, data such as the name of the product, trademark, manufacturer, price, quantity of goods in the warehouse and on the trading floor, the main characteristics of the product (weight, taste, number of units per package, type of packaging, etc.).

The duties of the auditor also include determining the number of purchases made by the outlet for the period, obtained from invoices and other documentation; comparison of current and past purchases of goods by this store; comparison of invoices with the actual quantity of goods in the warehouse.

The data is entered into specially designed questionnaires adapted for each outlet of the panel.

4. Calculation of reporting indicators.

All collected data is entered into databases and processed using software. For each brand of goods and for different groups of goods (in accordance with the individual requirements of the customer), the following indicators are calculated:

Number of sales of a particular brand (sales volume in quantitative terms)= quantity of goods in stock at the beginning of the period - the balance of goods in stock at the end of the period + purchases made by the outlet for the period. The number of sales is measured in the same units as the product (kilograms, liters, pieces, etc.).

Quantitative share of sales of a particular brand in relation to general sales products of this category= (number of sales of a particular brand / total number of sales of all other brands of the product) x 100%.

Monetary sales volume of a particular brand= the number of sales of a particular brand x the price of this brand in the study period.

Cash share of sales= (monetary sales of a particular brand / monetary sales of all other brands of the product).

Market share is determined using indicators such as weighted and numerical distribution, selection indicator, average share in turnover.

Numerical Distribution (NR) is the ratio of the number of stores that carry a given brand of product to the total number of a particular type of store where a consumer typically buys that type of product, expressed as a percentage.

PR = number of retailers of brand Y of product X / total number of retailers of product X, (%).

Weighted Distribution (WP) is the market share of product X held by retailers selling brand Y.

BP = total sales of product X by retailers who sell brand Y / total sales of product X, (%).

A weighted distribution takes into account the size of stores that carry a particular product. For example, a weighted distribution of 60% of brand Y of product X means that brand Y is represented in stores that together account for 60% of product X's sales.

Selection Indicator (SW)= VR / PR = average sales of product X in stores selling brand Y / average sales of product X across all retailers.

A VR of 60% and a PR of 20% means above-average sized stores are selected (there are not many of them, but they produce the main sales of this product). The selection indicator in this case is greater than 1, namely 60/20 = 3.

Average share in turnover (AM) shows what position a particular brand occupies in selected stores and can be considered as the market share of brand Y in the total turnover of product X in selected stores.

SD = turnover of brand Y of product X in selected stores / total turnover of product X in selected stores, (%).

Market share (DR) = HR x IV x SD = HR x SD.

5. Analysis of the received data.

Based on this analysis of market share, it can be concluded that a company can increase the availability of a product and the market share of this product in the following ways during the distribution process:

-	The choice of a larger number of outlets (in this case, the intensity of distribution increases).
	Choice of other larger outlets. With a constant distribution intensity, stores with a large sales volume for this product are selected. This is expressed as an increase in the selection indicator. If it is greater than 1, then stores with above-average sales are selected. We can say that with a constant distribution intensity, the weighted distribution increases.
	Increasing sales of the brand in selected stores. This is expressed in an increase in the average share in the turnover. Possible ways achieving this is more frequent visits to stores by the manufacturer's sales representatives and the improvement of the sales mechanism.

Audit Limitations:

-	Research is not carried out at points wholesale trade, Catering, imported trade with machines.
	Since the audit is carried out on a sample basis, the data obtained has a certain margin of error and is not 100% accurate. This should be taken into account when evaluating data and trends.
	Russian feature is that in district/regional cities, purchases are made not only directly by citizens, but also by residents of nearby regions. Thus, goods tend to "spread", i.e. the market volume determined by us for a given territory in reality turns out to be somewhat smaller due to purchases from residents of other territories that are not related to the studied area.
	The difference between supply and demand. Sometimes the supply of a product on the market does not mean at all that there will be a demand for it. Therefore, sellers may be faced with the issue of warehouse congestion, which will either lead to a reorganization of the warehouse or to the movement of goods to another location. Naturally, such urgent and large-scale changes cannot be taken into account by the retail auditor.

The benefits of an audit:

-	clearly illustrates the main position in the market of various categories of goods;
	allows you to determine the share of a particular brand in the market;
	gives you the opportunity to evaluate how your brands are presented in comparison with competitors' brands;
	shows the level of distribution and lack of goods in the warehouse in retail;
	allows you to identify new development opportunities;
	allows you to evaluate competitive activity;
	helps to find the best ways to use resources for the best presentation of the product;
	helps to identify and assess the threat posed by new players in the market.

Survey of consumers based on a statistical sample

The size of the market can be determined by asking customers, for example, whether they bought a product in a certain period of time, and then multiplying the number of positive answers by the average purchase volume.

The survey can be complete (related to the entire population) or selective. A full survey is conducted when the population is relatively small (for example, a highly specialized segment of the industrial market) or when very detailed information is required. If a sample is made, then only a part of the representatives of the general population is polled, and the results are approximated to the entire population with a given degree of accuracy.

The representativeness of the sample is a mandatory characteristic. This means that all essential characteristics of the population are presented in the sample in the same proportion in which they are distributed in the general population.

Significant characteristics are those that may have an impact on the results of the survey. The sample can be representative if the following requirements are met:

The sample size greatly depends on what limits of accuracy and reliability are needed in the this study. That is, we must specify indicators such as confidence interval and confidence level.

Confidence interval (Tdov, %) is the sampling error you specify. For example, if you set a confidence interval of 3% and the answers to a particular research question are 48%, this means that even if the entire population is surveyed, the real value will fall between 45 (48-3) and 51% (48+ 3).

Confidence probability ( Rdov, %) shows how confident you can be in your results and that the characteristics of the sample match those of the entire population being studied. In other words, how likely is a random answer to fall within the confidence interval. In the vast majority of studies, 90-95% is sufficient.

If we combine the confidence probability and the confidence interval, then we can say that the answers to the question with a 95% probability will fall between 45 and 51%.

When approximating the results for the entire population, it is assumed that the indicator under study has a normal distribution. To assess the accuracy of the study, the standard deviation (s) is used, calculated by the formula:

where p is the expected proportion of positive responses. This value is not exactly known in advance, but it affects the sample size. The largest sample size would be required if the answer options were distributed in a ratio of 50 to 50%;
q = 1 — p ;
N— sample size.

An important property of a normal distribution is that 95.4% of all observations lie between the sample mean and 2. This means that at a 94.5% confidence level, the confidence interval will be ±2 of the mean. Other relationships between confidence level and confidence interval are shown in the table.

This pattern is true for any normal distribution. The factor by which we multiply the standard deviation to get the boundary of the interval is called z-value, and a table like this one is also called z-table.

EXAMPLE. The company sells a software product for automating the workflow of enterprises. This product is only suitable for large and medium-sized enterprises. The product is licensed by the number of workstations. Known data on the average purchase of this product (the cost of the total number of automated jobs) for large and medium-sized enterprises. Based on a statistical sample, it is required to determine the volume of the product market for a certain period in a given region.

According to the conditions of the problem, the general population is limited to enterprises of only large and medium scale. Let's define: large enterprises - with more than 1000 employees, medium - from 500 to 1000 people. According to statistical reference books, we find the addresses and other details of enterprises, as well as how many such enterprises are registered in the region under study at the end of the study period.

Let's say the number large enterprises- 1000, medium - 5000.

If you can not find directories with such information, you can contact the services of a local marketing / information agency.

Further, the task is reduced to compiling a random sample from the found enterprises and getting from its participants an answer to the question: did their enterprise buy similar software products for a given period of time?

Since the volume of purchases from large and medium-sized enterprises is different, the general population must be divided into two strata and each stratum should be examined separately.

We define the required accuracy of the study as Rdov= 90% and Tdov= 5%. This means that for our sample, we want to determine the number of enterprises that bought the product in the entire general population with a reliability of 90% and a maximum error of 5%. According to the z-table these parameters give us the following information: Standard deviation multiplied by 1.65 (z-score corresponding to 90% observation percentage) should be 5%.

From here we find that the standard deviation in our random sample should be equal to:

5% / 1,65 = 3,03%.

Let, based on our experience and knowledge of the market, we assume that the product could be bought by approximately 20% of the enterprises of each stratum, that is, the parameter p equal to 20%, respectively q = 80%.

We substitute these values into the standard deviation formula (1) and find required size samples:

where N = 174 enterprises.

There is another nuance here. We have just found the sample size assuming that the population size is unboundedly large. In our case, this is not the case, and the number of enterprises is limited. Therefore, the required sample will be smaller.

There is a formula that allows you to adjust the required sample size if the size of the population is known:

We consider the new sample size.
For medium enterprises: N' = 174 / (1+ 174 / 5000) = 168 enterprises.
For large enterprises: N' = 174 / (1+ 174/ 1000) = 148 enterprises.

As can be seen, the smaller the population, the greater the difference in sample size.

So, we determine the number of enterprises that bought a software product by asking the participants of the study the question: “Did you buy similar software products during the period t?”

Answer options:

-

We summarize the results in a table. For example, the answers were distributed as shown in Table. one.

Table 1

Poll results

Strata	Number of enterprises that answered "No"	Total number of surveyed enterprises
Medium enterprises
% from the sum
Large enterprises
% from the sum

We see that in our sample, 67 medium-sized businesses bought the product. This is 40% of the general population. So, with a probability of 90%, we can expect that in the entire general population the product was bought by 35 to 45% of enterprises, i.e. from 1750 to 2250 enterprises (35 and 45% of 5000 respectively).

Knowing the average purchase volume for each group of enterprises, we determine the market volume in each stratum by multiplying the number of enterprises by their average purchase volume. The average purchase volume can be determined from our own sales data.

We enter the calculation data in Table. 2.

table 2

Calculation of market volume

Strata	Number of enterprises that answered "Yes"	Average purchase volume of a product, thousand dollars	Market volume, thousand dollars
Medium enterprises	from 1750 to 2250

Large enterprises	from 150 to 250

The total volume of the market of medium and large enterprises is obtained by adding the indicators of the two strata.

So, with a probability of 90%, the market volume of our product is in the range from 67,500 to 92,500 thousand dollars.

As you can see, the total error is quite large. However, the required accuracy is determined from the purpose for which we define the market size.

For example, the goal is to determine our market share.

Let our company's sales amount to $6 million, of which we sold $3.2 million worth of product to medium-sized enterprises, and $2.8 million to large ones.

So, in the market of medium-sized enterprises, our share is in the range from 4.7 to 6%:
(3.2 million / 67.5 million) x 100% = 4.7%.
(3.2 million / 52.5 million) x 100% = 6%.

Such an error in determining the proportion is usually acceptable. If not, we take a larger sample.

In real research, it is not so much the accuracy of the obtained values that is most often important, but the possibility of comparing these values for different periods of time. Therefore, the confidence interval is selected based on the possibility of comparing the values. That is, if next year we use the same method, then the error will be the same.

Differences in sample size are also not always important. For example, sample size is of fundamental importance when determining market shares, and it is necessary to study the situation with competitors occupying a share comparable to a confidence interval (say, 2-5%), or when several groups of products are studied and analysis is required for each group separately.

In industrial market research, the main difficulty is to find required amount respondents. In order to interest respondents, as a rule, they are offered certain remuneration- gifts, discounts, participation in sweepstakes.

In surveys, for greater efficiency, several goals are set at once in addition to determining the size of the market, for example, determining preferences, further intentions of the consumer, creating a database potential clients etc. Therefore, the questionnaire is not limited to one question.

Indirect Methods

In the absence of statistical data or lack of time and money for statistical research, indirect methods are used. These methods estimate the size of the market very roughly. Therefore, they must be applied, guided by the following rules:

share method.

If there is data on the size of the market of the entire industry, then it is possible to estimate what share our product class has in the entire industry.

For example, let's estimate the market size electronic document management. Electronic document management refers to the market of automated software systems. From open sources (IDC report Services 2005—2009 Forecast and 2004 Vendor Shares- these are paid studies, but some of their fragments are published openly) it is known that the size of the market for automated software systems in Russia in 2004 was estimated at $ 1.9 billion. The cost of document management is about 4-5% of all costs for the implementation of automation systems (according to expert estimates of participants in this market). Consequently, the volume of the electronic document management market in 2004 is from 76 to 95 million dollars. If we compare this figure with the data of special studies, for example, market research by the RBC agency (RosBusinessConsulting, an analytical report "The market for electronic document management systems in Russia", Moscow, 2004), we get approximately the same values.

Probabilistic method.

For example, you are selling software. Your potential customers are commercial enterprises of certain sizes and industries operating in a certain territory.

To determine the size of the market, you need to answer a number of questions. In responses, it is desirable to use data, relying on as realistic arguments as possible. The accuracy of the probabilistic method depends entirely on this.

Question 1. How many potential consumer firms know about my firm and product?

Let's say about 10%.

Question 2. How many potential customers who know about my firm and product can use the product from a technical point of view?

Let the answer be 70%.

Question 3. How many potential customers who know about my company and product can use the product from a technical point of view, how many of my company is suitable as a supplier of goods? Your company may not suit them because of its reputation, location of the office, language of communication.

For example, it is 25%.

Question 4. How many potential customers who know about my firm and product can use the product from a technical point of view, and how many potential customers who are eligible for my firm as a supplier of goods can afford to buy the product?

For example, 10 out of 100 companies will actually pay for the program, the rest will be acquired illegally. But if the program is protected by some kind of key, this will not happen, the program simply will not be bought without a license.

Let's say the answer is 10%.

We multiply the probabilities: 0.1 x 0.7 x 0.25 x 0.1 = 0.00175.

This means that our program occupies 0.175% of the market.

Let's say our firm sells $200,000 a year.

Therefore, the market size is (200,000 / 0.175) x 100 = $114,285,714 = $11 million.

The market size can be estimated based on the total number of customers who contacted us and their average purchase amount.

For example, a manufacturing company commercial equipment wants to estimate the market share of POS terminals for 2004. It is known that the average time to make a purchase decision, i.e. the time difference between the date the client applied to the company and the date of the actual purchase is 2 months (an indicator typical for the industrial market). The company itself sells cash terminals and keeps records in the CRM system.

Suppose a marketer receives the following data from a CRM system:

average purchase amount at POS terminals — $7,000 ( Spr).

The number of clients (companies) who applied to the company regarding cash terminals in the period from November 1, 2003 to November 1, 2004 is 200 (). We take such dates in order to take into account the time of decision making. That is, we assume that customers who applied to the company during this period will make a purchase only after 2 months, namely from January 1, 2004 to January 1, 2005.

The market volume is determined by the formula:

where — the volume of the POS terminal market in 2004 in money terms. The numerator of the formula is the market size, provided that all customers who bought terminals in 2004 (from us or from competitors) called our company beforehand;
- correction factor. This is an adjustment for clients who, for various reasons, did not call our company. The coefficient is determined by experts or based on customer surveys. For example, we know that only 90% of customers know our company and our cash registers. Of these, about 70% will definitely call us before making a purchase somewhere else to find out our conditions (it is clear that this percentage will be higher for recognized market leaders than for small companies).

Based on this, kpopr is equal to 0.90 x 0.7 = 0.63.

That is, the number of those who called us is 63% of the actual number of customers who bought cash registers.

Total = ($7,000 x 200 customers) / 0.63 = $2.222 million

Expert survey.

Market size is often determined based on a survey of experts.

Experts can be specialists of the enterprise, industry consultants or specialized organizations, as well as consumers of products.

There are several methods of expert surveys (Table 3).

Table 3

Methods of expert surveys

Poll method	Method Essence
Method of average assessment according to individual assessments of experts	Experts express their individual opinion on the possible value of the market volume in the period under study. Based on the assessments of all experts, the final assessment of the market capacity is calculated as a simple arithmetic average of individual assessments of experts
Method of pessimistic, optimistic and most probable opinions	Experts express pessimistic, optimistic and most probable opinions regarding the size of the market capacity. Each opinion is assigned a weighting coefficient that characterizes the probability of a situation occurring in which the actual market volume will correspond to the expert assessment. For each expert, the final score is determined as the arithmetic mean of the weighted optimistic, pessimistic and most probable estimates, taking into account their weighting coefficients. The simple arithmetic mean of the final estimates of experts characterizes the market volume
Commission Method	A group of specialists of the organization, industry experts makes an agreed decision regarding the possible value of the market volume
Delphi method	Reusable individual surveys of experts. The scores obtained from the first survey are provided to each expert so that he refines his individual assessment, taking into account the opinions of other experts. Opinion refinement procedures are carried out until the spread of opinions of all experts corresponds to a predetermined value of their dispersion. The final score is the average of individual expert opinions

Expenditure method (standard consumption method).

This method consists in summing up the norms for the consumption of a product, multiplied by the number of consumers.

For example, it is known that every resident of Ukraine drinks 10 liters of beer a year (data from the statistical office). Ukraine has 48 million people.

The capacity of the Ukrainian beer market in physical terms = 48 million x 10 liters = 480 million liters.

Provided that the average cost of a liter of beer = 1.5 hryvnia, then the capacity of the Ukrainian beer market in monetary terms = 480 million x 1.5 hryvnia = 720 million hryvnia.

This method can be based on how much money the consumer can spend to purchase the proposed product. First, the total income of the inhabitants of the study region is calculated. The result is then adjusted for the non-saving share of the population's income, then for the share of the population's expenditures corresponding to the project of the commodity group or subgroup. Data for these calculations can be found on the websites of the State Statistics Committee and the Central Bank of Russia.

The market capacity calculated in this way usually turns out to be overestimated, so this method can be called optimistic.

income method.

Here, the annual turnover of one of the market players working with similar products is taken as the basis for calculations. Some of them publish the results of their work in the press, even indicating the share of the market they occupy. To find data on the size of the local market, the result must be corrected by determining the share of enterprises of this type in the total sales of the selected group of goods. The data obtained in this way on the volume of the regional market can be used for developments in another region, but at the same time it is necessary to take into account the data of the State Statistics Committee on the ratio of the purchasing power of the regions. This method gives a pessimistic estimate.

Extrapolation.

Data from previous years are extrapolated taking into account past growth rates.

Direct Accounting Methods

Press monitoring.

In the case of an industrial market, when there are few sellers, few buyers, and each purchase costs big money, the market size can be calculated by directly summing up data on projects announced by competitors.

Enterprises operating in such markets, as a rule, publish information about their projects in the press and on the Internet (since there are few projects, they tend to tell about each at least on their own website). Thus, by carefully following the emerging information, by monitoring the press, competitive and thematic Internet sites, one can collect very accurate information about all projects in this industry for the reporting period.

Statistical and accounting data.

Exclusive

Often, a company has access to specific data, which can be used to accurately determine the size of the market.
Let's go back to the POS example. It is known that a special stamp must be pasted on all cash terminals during the sale, certifying that this type of cash terminal is allowed for operation by the State Tax Inspectorate. It is also known that the right to manufacture and sell such stamps belongs to only one organization.

If we manage to find out from this organization how many stamps were sold in a year, then by multiplying the number of stamps by the average cost of a cash terminal, we will get the market volume and our share in it (according to our own sales data).

Another example: the market for electronic document management systems on the platform Lotus Notes/Domino.

All companies selling software on the platform Lotus Notes buy licenses for lotus from IBM (the manufacturer of this platform). Therefore, IBM has data on all sales in a given region. Multiplying the number of Lotus licenses sold by the average software price gives the market size.

public data

If you are selling a product imported from abroad, you can use customs databases.

Some industry associations and statistical agencies collect and publish data on the overall level of sales in their industries.

However, such statistics can be very inaccurate. Most Russian companies never provide accurate information about the volume of services produced or sold (double-entry bookkeeping, left income, etc.) and try in every possible way to circumvent the existing rules (no matter what it concerns - customs, accounting or something else). Therefore, in Russia it is hardly possible to claim that you have accurate information about the market or about any company (unless we are talking about a market where there is only a very limited quantity sellers or a limited number of buyers).

So, there are many methods for determining the size of the market. And their number, of course, exceeds that described in this article. It should be noted that in Russian practice, companies pay much more attention to promoting finished products rather than studies that require high-quality input data. Serious quantitative research takes a lot of time and money and is not justified for every company. Therefore, marketers often evaluate the market "offhand" using expert assessments. However, with the development information technologies and the spread of CRM systems for quantitative research, there are more and more opportunities.

LITERATURE

1. Materials of the training course for the retraining program in marketing // State University management "RIMA", 2002.
2. Kotler F. Marketing Management Millennium. 10th ed. - SPb., M., Kharkov, Minsk: - Publishing house "Piter", 2000.
3. Avdeev V.Yu. The use of sampling methods in the audit. http://www.audit-it.ru/viborka.php?foprint=1.
4. Haig P., Haig N., Morgan K. Marketing research in practice: Basic methods of market research. — Balance Business Books, 2005.
5. Anurin V., Muromkina I., Evtushenko E. Marketing research of the consumer market: Unique domestic experience / Tutorial. - St. Petersburg: Publishing house "Peter Print", 2004.
6. Site materials http://marketing.spb.ru.

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