Market share occupied by this. Market share is a marketing metric: evaluation and analysis. Market segmentation. Market share analysis

Market share is a traditional tool that can be used to assess the performance of any company, as well as predict future 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 to the total sales 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 accepted in the world economy, that allows you to perfectly measure this indicator. The share of a firm 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 relevant market segment cannot be calculated, then the proportion can be determined with respect to parameters such as:

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

What are the ways to calculate market share?

There are several effective ways by which you can correctly determine the proportion, namely:

In kind

The indicator is the number of commodity units sold by a certain company 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 \u003d Unit sales in percentage / Volume 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 the products are sold. In this case, the calculation formula will look like this:

Market share \u003d Sales volume in foreign currency / Total sales figures in the market segment.

Through the intensity of brand consumption

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

Brand market share \u003d Brand penetration * Brand re-purchase * Brand consumption intensity.

Brand penetration is the percentage of those consumers who have purchased a brand at least once, out of all consumers who have purchased the product to which the company belongs.

Repurchase reflects how committed consumers are to the brand. This indicator is calculated as a 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 purchase of a company's products by those consumers who repeat the purchase to the average consumption of all product groups in a particular category.

What are the goals of conducting a market share analysis?

The share analysis is carried out to determine two objectives, in particular:

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

It should be noted 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, segments that are more aggregated should be used to determine competitive advantages. 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 specific market?

To correctly calculate market share, you need to collect relevant data. It should be noted that collecting detailed information on a market segment is a rather difficult task. There are a number of sources from which to get the data, in particular:

State statistics.
Manufacturers associations.
Retail trade networks.
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 you can 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, the market share is a calculated indicator, with the exception of those cases when it is determined by an expert method by asking experts direct questions regarding their opinion on the value of this indicator for individual products.

Usually, the sales volume for calculating the market share indicator is expressed in monetary units. However, in order to exclude the influence on this indicator of prices, it is possible, where appropriate, to use physical 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 certain 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 from a representative sample of points of sale - wholesale and retail outlets.

Obviously, different outlets can be classified according to their location, type, sales volume, etc. Different types of outlets should be represented in the sample. To form a sample, you must have a complete database of outlets. Only in this case it becomes possible to project the obtained data onto the entire studied market (market segment). The collection of data on the volume of sales of the studied products of competing companies is carried out.

Trade audit is usually performed by large research agencies with extensive resources for collecting and analyzing data and having proven research technology. 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 trade audit is carried out in the following sequence.

First, a complete census (sensus) of the trading network of the study area is made. The census includes any retail outlets that have the studied goods in the warehouse, ready for sale. As a result of the sensus, we get a complete description of the studied general population - 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. The panel is the point of sale where the sales of the investigated product will be recorded. The panel is divided into sub-samples of different types of outlets. You should first agree with the management of outlets about the possibility of the presence of an auditor and collect information. The auditor works directly at the outlet and maintains a description of all goods of the studied category, both in the trading floor and in the warehouse. The audit is carried out cyclically. Each audit cycle reflects sales over a specific period of time.

All collected data are entered into databases. Sales volumes and market share are calculated for each brand of product and for different product groups.

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 is the total sales volume of "our" product. Then the market share of product A for a sample of outlets - DRA is calculated as follows:

(6)

The market shares of all products studied in our example are calculated in a similar way:

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 market share indicator is calculated only for the main competitors. Let's investigate the market share of "our" product and two products of major competitors. Then

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

The sales volume for a sample of retail stores can be determined using Nielsen's regular sales panel, which provides an overview of all retailers in a given industry. Based on measurements on the trading panel, the Nielsen index is calculated, which determines the sales volume by product, brand for a certain period of time (usually two months). The Nielsen index characterizes the average sales in one store in a sample over a certain period of time:

(8)

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

Market share is calculated using the formulas above.

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

Numerical distribution (HR) is the ratio of the number of retail stores in which a given brand of product is represented to the total number of a particular type of store where a consumer usually purchases that type of product, expressed as a percentage.

CR \u003d number of retailers of the brand Y product X / total number of merchants of the product X (%).

Weighted distribution (BP) is the market share of a product held by retailers selling the Y brand name for a given product.

BP \u003d total product sales X retailers who sell the brand Y/ total product sales X (%).

Weighted allocation takes into account the size of the stores in which a particular product is presented. For example, a weighted distribution of 60% of the brand Y of a product X means that the U brand is represented in stores that provide a total of 60% of product sales X.

Selection indicator (IV) \u003d BP / HR \u003d average product sales X in stores selling the U brand / average product sales across all retailers. BP of 60% and CR of 20% means that the selected stores are above average size (there are not many of them, but they produce the main sales of this product). The selection indicator in this case is greater than one, namely 60/20 \u003d 3.

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

SD \u003d brand turnover for product X in selected stores / total turnover of products in selected stores (%).

Then the market share (DR) is defined as DR \u003d CR IV SD \u003d \u003d BP SD.

2. Diary consumer panel of regular respondents.

The respondents use a diary (records + receipts and receipts) to record all purchases of the studied product group. 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. Typically, these panels are balanced in terms of family size, age of head of household, household income, and geography. Panel members are recruited on a quarterly basis and added to the active list after receiving a report from them that meets the standards of the research company. Participants are encouraged to participate in the panel. A family can be excluded from the panel on application or simply without sending 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, with the exception of the method of fixing purchases.

In this case, the respondents are issued an ID 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 data read by the scanner is appended with the respondent's code. Unlike the first method, the scanner panel allows you to assess sales within different segments of the 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 are made in stores equipped with scanners.

4. Based on panel surveys, primarily for consumer goods (both frequent consumption, such as food, and durables, 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 brand's market share; ПР - brand penetration, characterized by the percentage of buyers of a given brand of the total number of buyers who purchase products of the category to which this brand belongs at least once over a certain period of time; PP - re-purchase (replacement) of the brand, determined by the percentage of buyers who make

repeat purchases of a product of this brand. This is the percentage of consumers who have become adherents of a given brand; And - intensity of consumption of a brand - the ratio of the volume of consumption of a given brand by buyers who make repeated purchases (brand followers) to the average level of consumption of a given 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 one and the other group characterizes the group of consumers who purchased the product for the first time. Re-purchase, which characterizes secondary demand, for goods of short-term use means that the consumer continues to buy the product of this brand, i.e. remains its adherent. For durables, secondary demand means returning to a given brand of product with a product change or additional purchase. This method is 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	Re-acquisition
		XXXX
		XXXX

Penetration value of the brand X is 40%, reacquisition 66% (8: 12). The intensity of consumption of the brand is calculated as I \u003d 3: 1.8 \u003d 1.67, where the number 3 characterizes the ratio of the quantity of the product X (the sum of initial and repeated purchases) to the number of buyers who bought this product (12: 4 \u003d 3). The number 1.8, which characterizes the average level of consumption of this category of products, is calculated in the same way for all buyers of all studied products (18:10 \u003d 1.8).

The market share is calculated using the formula (1) as DR \u003d 0.4 0.66 1.67 \u003d 44% (check: DR \u003d 8/18, column "Reacquisition").

5. The survey of consumers (individuals and legal entities) is carried out at the respondent's place of residence, in public places, at the workplace or in any other setting that requires personal contact.

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

To determine the market share of consumer products of everyday 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 (RW) by the number of buyers of each product - P characterizes the sales volume of competing products for the period of time under study.

For rapidly consumable products purchased systematically, for which there are certain consumption rates (for example, 2 g of toothpaste for one brushing of teeth), it is sufficient to determine on the basis of a survey only the loyalty of consumers to a particular brand and the frequency of brushing.

The same applies to the calculation of the sales volume of products of the category B2B, having consumption standards, for example, consumables, 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 analyze market share based on paired comparisons, you must:
1) make up all possible pairs of the products under study 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 research). The respondents are asked to compare products of the same type supplied to the market under study in pairs. In this case, the questions of the questionnaire can be formulated, for example, as follows: "If you had to choose product A or product B when purchasing, which one would you prefer?" Possible answers: "Product A", "Product B", "Products are equal";
3) based on the data obtained, evaluate the market share of products of competing companies.

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

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

Table 3.4. Determining market share based on paired comparisons

The numbers at the intersection, for example, of the first row A and the second column B (0.61) represent the fraction 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 fraction to one (0.39). If the respondent finds it difficult to choose the preferred trade mark, then the numbers 0.5 are entered in the table.

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

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

It is carried out by direct processing and analysis of the judgments of experts, which can be employees of marketing departments of organizations, retail stores, as well as employees of consulting firms, marketing centers, marketing specialists, attracted 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, you can use secondary data obtained from Russian and international statistical collections.

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

Having data on labor productivity in the industry and the number of workers employed in production by the main competitors, and assuming that all manufactured products are 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 production and the volume of purchases of resources by competitors, it is possible to estimate the volume of production of competitors by dividing the volume of resources by the cost of resources for the production of a unit of production.

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

In the case of an industrial market, when there are few sellers, few buyers, and each purchase is expensive, the market size can be calculated directly by adding 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 monitoring the press, competitive and thematic sites of the Internet, you can collect very accurate information about all projects in this industry for the reporting period.

Often the company has access to specific data, which can be used to accurately determine the size of the market. For example, upon sale, all POS terminals must have a special stamp that certifies that this type of POS is approved for use 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 per year, then by multiplying the number of stamps by the average cost of the POS, you can get the market size and your share in it (based on your own sales).

When using publicly available data, keep in mind that they can be very inaccurate. Most Russian companies do 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 anything else).

Obviously, using different methods for determining market share will yield different results. In this case, either the most reliable method should be preferred, or the average value of the market share indicator should be used.

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

While market share is the most important metric of a company's marketing performance, there is no generally accepted perfect method of measuring it. The company's share can be calculated both in the market as a whole, and within a particular segment served. Served segment - part of the total volume of the market for which there is competition. In a situation where the volume of sales in the market as a whole is unknown, the share is determined relatively:

regarding the 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 physical terms (in piece terms) - the number of units of goods sold by a particular company as a percentage of the total sales in the market, expressed in the same units.

Market share by piece \u003d Piece sales (quantity)
sales (%) Volume of piece sales throughout the market (quantity)

This formula can, of course, be transformed to output either unit sales or market-wide unit sales in two other variables, as shown below:

Piece sales \u003d Market share by piece sales (%) * Volume of piece sales throughout the market

Market share in value terms (in terms of sales)... Market share by volume of sales differs from unit market share in that it reflects the prices at which goods are sold. In fact, a relatively straightforward way of calculating relative prices is to divide market share by sales by market share by piece.

Market share by volume \u003d Sales volume (rub)
sales (%) Total market sales

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

Brand market share \u003d 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 for a certain period to which this brand belongs. Re-acquisition of a brand characterizes the loyalty of consumers to this brand. It is defined as the percentage I of repeat purchases made by customers over a certain period from among those who have already purchased the given brand at least once. Brand consumption intensity It is calculated as the ratio of the average consumption of a given brand of repeat buyers to the average consumption of all groups in a given category of goods.

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

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

At the same time, three components of this task can be distinguished:

Market volume is usually understood as the total cost of all goods in 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 specific brand name. On the basis of regular measurement of 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 market size with the highest marketing activity of all companies in that industry sector of the market, given the state of the marketing environment. This is a theoretically calculated value that is never actually reached.

Market potential plays an important role in comparing it to the current market size. On the basis of this comparison, there is clarity about possible market expansion. And these opportunities are one of the main indicators of the attractiveness of the market when making decisions on entering this market.

Methods for determining market size may differ depending on:

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

It can be one city, a specific region or several regions, the whole of Russia, etc. At the same time, if the market is not homogeneous and is divided into segments, the market size must be determined for each segment separately. The resulting indicators are then summed up.

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

This article will show the methods for assessing the market size that 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 market size based on primary data

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

Retail audit Is a measurement of the flow of goods from a manufacturer to a consumer through a retail trade network. The method is based on the assumption that the entire volume of the consumed product was purchased in stores, therefore, by 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.

A retail audit allows you to determine:

Retail auditing is the responsibility of large research agencies with extensive data collection and analysis resources and proven research technology. The most popular agencies 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.

A retail audit is as follows:

1. The agency carries out a complete census (sensus) of the trading network of the study area.

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

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

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

The panel is the stores where the sales of the product under study will be recorded. The agency preliminarily agrees with them about the possibility of the presence of its auditors and 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 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 outlet and maintains a description of all goods of the studied category, both in 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, for each unit of goods, data such as the name of the product, trade mark, manufacturer, price, quantity of goods in the warehouse and in the sales area, the main characteristics of the product (weight, taste, number of units in a package, type of packaging, etc.) .P.).

The auditor's responsibilities also include determining the number of purchases made by the outlet during 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 developed questionnaires adapted for each outlet of the panel.

4. Calculation of reporting indicators.

All collected data are 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 in quantitative terms) \u003d 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 during the period. The number of sales is measured in the same units as the product (kilograms, liters, pieces, etc.).

The proportion of sales of a particular brand in relation to the total sales of products in this category \u003d (the number of sales of a particular brand / the total number of sales of all other brands of the product) x 100%.

Cash volume of sales of a specific brand \u003d the number of sales of a particular brand x the price for this brand in the study period.

Cash share of sales \u003d (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 (PD) Is the ratio of the number of stores in which a given brand of product is represented to the total number of a particular type of store where the consumer usually purchases this type of product, expressed as a percentage.

CR \u003d number of traders in retail of brand Y of product X / total number of traders in product X, (%).

Weighted distribution (BP) Is the market share of product X held by retail marketers of Y.

BP \u003d total sales of product X by retailers who sell brand Y / total sales of product X, (%).

Weighted allocation takes into account the size of the stores in which a particular product is presented. For example, a weighted distribution of 60% of Brand Y of Product X means that Brand Y is represented in stores that total 60% of Product X's sales.

Selection indicator (IV) \u003d BP / CR \u003d average sales of product X in stores selling brand Y / average sales of product X across all retailers.

BP of 60% and CR of 20% means that the selected stores are above average size (they are few, but they produce the main sales of this product). The selection indicator in this case is greater than 1, namely 60/20 \u003d 3.

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

SD \u003d brand Y turnover of product X in selected stores / total turnover of product X in selected stores, (%).

Market share (DR) = CH x IV x SD \u003d BP x SD.

5. Analysis of the data obtained.

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

-	Choosing a larger number of outlets (in this case, the distribution intensity increases).
	Selection of other larger outlets. With a constant distribution intensity, stores with a large sales volume for a given product are selected. This is reflected in an increase in the indicator of the selection indicator. If it is more than 1, then stores with a sales volume above average are selected. We can say that with a constant distribution intensity, the weighted distribution increases.
	Increased sales of this brand in selected stores. This is reflected in an increase in the average share in the turnover. Possible ways to achieve this are more frequent visits to stores by manufacturer's sales representatives and improved sales mechanisms.

Audit Limitations:

-	Research is not carried out at the points of wholesale trade, public catering, import trade from cars.
	Since the audit is performed on a sample, the data obtained has a certain margin of error and does not have 100% accuracy. This should be taken into account when evaluating data and trends.
	The Russian peculiarity is that in district / regional cities, purchases are made not only directly by the townspeople, but also by residents of nearby regions. Thus, the goods tend to "spread out", ie. The volume of the market we have determined for a given territory in reality turns out to be somewhat smaller due to the purchases of residents of other territories that do not belong to the studied one.
	The difference between supply and demand. Sometimes the supply of a product on the market does not mean at all that there will be demand for it. Therefore, sellers may be faced with the question of overloading the warehouse, which will lead either to 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 on the market;
	gives an opportunity to evaluate how your brands are presented in comparison with the brands of competitors;
	shows the level of distribution and lack of goods in stock in retail;
	allows you to identify new development opportunities;
	allows you to assess the competitive activity;
	helps to find the best ways to use resources for the best product presentation;
	helps to identify and assess the threat posed by new players in the market.

Consumer survey based on statistical sample

Market size can be determined by asking shoppers, for example, if they bought a product in a given time frame, and then multiplying the number of affirmative responses by the average purchase volume.

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

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 defined as those that may influence the survey results. The sample can be representative if the following requirements are met:

The sample size significantly depends on what limits of accuracy and reliability are needed in a given study. That is, we have to set indicators such as the confidence interval and the confidence level.

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

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

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

When approximating the results for the entire general 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 - the expected share of positive answers. This value is not known exactly in advance, but it affects the sample size. The largest sample size will be required if the answer choices are split 50 to 50%;
q = 1 — p ;
N - sample size.

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

This pattern is valid for any normal distribution. The coefficient by which we multiply the standard deviation to obtain the boundary of the interval is called z-value, and a table like this 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 based on the number of workstations. There are data on the average purchase volume of this product (the cost of the total number of automated workstations) for large and medium-sized enterprises. Based on a statistical sample, it is required to determine the volume of the market for a product for a certain period in a given region.

According to the terms 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. Using statistical reference books, we find addresses and other details of enterprises, as well as how many such enterprises were registered in the study region at the end of the study period.

Let's say the number of large enterprises is 1000, medium-sized ones - 5000.

If you cannot find reference books 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: has their enterprise bought 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 should be divided into two strata and each stratum should be examined separately.

We define the required research accuracy as Rdov \u003d 90% and Tdov \u003d 5%. This means that for our sample, we want to determine the number of enterprises that bought a 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: the standard deviation multiplied by 1.65 (the z-value corresponding to the 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 about 20% of enterprises in each stratum, that is, the parameter p is equal to 20%, respectively q = 80%.

We substitute these values \u200b\u200binto the standard deviation formula (1) and find the required sample size:

where N \u003d 174 enterprises.

There is one more nuance here. We have just found the sample size assuming that the population size is infinitely 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 you know the size of the general population:

We calculate the new sample size.
For medium-sized enterprises: N '\u003d 174 / (1+ 174/5000) \u003d 168 enterprises.
For large enterprises: N '\u003d 174 / (1+ 174/1000) \u003d 148 enterprises.

As you can see, the smaller the general population, the more noticeable the difference in the sample size.

So, we determine the number of companies that have bought a software product by asking the survey participants the question: "Have you bought similar software products in the period t?"

Answer options:

-

We summarize the results in a table. For example, the answers were distributed as shown in table. 1.

Table 1

Poll results

Strata	The 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 represents 40% of the general population. This means that, with a 90% probability, 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 size in each stratum by multiplying the number of enterprises by their average purchase volume. Average purchase volume can be determined from our own sales data.

We enter the calculation data in table. 2.

table 2

Market size calculation

Strata	The number of enterprises that answered "Yes"	Average purchase volume of a product, thousand USD	Market size, thousand USD
Medium enterprises	from 1750 to 2250

Large enterprises	from 150 to 250

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

So, with a 90% probability, the market size 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 are determining the market size.

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

Let the sales of our company be $ 6 million, of which we sold a product for medium-sized enterprises for $ 3.2 million, and for large enterprises for $ 2.8 million.

This means that in the market of medium-sized enterprises, our share is in the range of 4.7 to 6%:
(3.2 million / 67.5 million) x 100% \u003d 4.7%.
(3.2 million / 52.5 million) x 100% \u003d 6%.

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

In real studies, most often it is not so much the accuracy of the obtained values \u200b\u200bthat is important as the possibility of comparing these values \u200b\u200bover different periods of time. Therefore, the confidence interval is selected based on the possibility of comparing 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 critical if market shares are being determined and it is necessary to study the situation with competitors that occupy a share comparable to the confidence interval (say, 2-5%), or when several product groups are studied and analysis is required for each group separately.

In industrial market research, the main difficulty is finding the required number of respondents. To interest respondents, as a rule, they are offered a certain reward - 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 of potential customers, 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 market size very roughly. Therefore, they need to be applied, guided by the following rules:

Fractional method.

If we have data on the market size of an entire industry, then we can estimate how much our product class occupies in the entire industry.

For example, let's estimate the volume of the electronic document management market. Electronic document management refers to the market of automated software systems. Open source (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 volume of the market for automated software systems in Russia in 2004 was estimated at $ 1.9 billion. Document flow costs account for about 4-5% of all costs of implementing automation systems (according to expert assessments of participants in this market). Consequently, the volume of the electronic document management market in 2004 ranges from 76 to 95 million dollars. If we compare this figure with the data of special studies, for example, the market research of the RBC agency (RosBusinessConsulting, analytical report “Market of electronic document management systems in Russia”, Moscow, 2004), then we get approximately the same values.

Probabilistic method.

For example, let's say you sell software. Your potential customers are businesses of certain sizes and industries operating in a certain area.

Determining the size of the market requires answering a number of questions. It is advisable to use data in the answers, relying on as real arguments as possible. The accuracy of the probabilistic method entirely depends 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 company and about the 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 about the product can use the product from a technical point of view, how many is suitable for my company as a supplier of goods? Your company may not suit them because of its reputation, office location, language of communication.

For example, this is 25%.

Question 4. How many potential customers who know about my company and about the product can use the product from a technical point of view, and how many potential customers who are suitable 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 key, this will not happen, the program simply cannot 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 \u003d 0.00175.

This means that our program has a market share of 0.175.

Let's say our firm's sales are $ 200,000 per year.

Therefore, the market size is (200,000 / 0.175) x 100 \u003d $ 114,285,714 \u003d $ 11 million.

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

For example, a commercial equipment manufacturer wants to estimate the market share of the POS market in 2004. It is known that the average time for making a purchase decision, i.e. the time difference between the date of the client's contact with the company and the date of the actual purchase is 2 months (an indicator typical for the industrial market). The company itself sells point-of-sale terminals and keeps records in the CRM system.

Let's say a marketer receives the following data from a CRM system:

average purchase amount at POS - $ 7,000 ( Sср).

The number of customers (companies) who contacted the company regarding POS 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 the decision. That is, we assume that customers who have contacted 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 is the volume of the POS market in 2004 in monetary terms. The numerator of the formula is the volume of the market, provided that all customers who bought terminals in 2004 (from us or from competitors) have previously called our company;
- correction factor. This is a correction for clients who, for various reasons, did not call our company. The coefficient is determined by expert advice or based on customer surveys. For example, we know that only 90% of customers know our company and our cash desks. Of these, about 70%, before making a purchase anywhere else, will definitely call us to find out our conditions (it is clear that recognized market leaders will have a higher percentage than small companies).

Based on this, the coefficient is 0.90 x 0.7 \u003d 0.63.

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

Total \u003d ($ 7,000 x 200 customers) / 0.63 \u003d $ 2,222 million

Expert survey.

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

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

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

Table 3

Expert survey methods

Polling method	The essence of the method
Average assessment method based on individual expert assessments	Experts express their individual opinion regarding the possible value of the market volume in the period under study. Based on the assessments of all experts, the final estimate of the market capacity is calculated as a simple arithmetic mean of the individual assessments of experts
Method of pessimistic, optimistic and most probabilistic opinions	Experts express pessimistic, optimistic and most probable opinions regarding the size of the market capacity. Each opinion is assigned a weight coefficient that characterizes the likelihood of a situation in which the actual market volume will correspond to the expert assessment. For each expert, the final assessment is determined as the arithmetic weighted average of the optimistic, pessimistic and most probabilistic assessments, taking into account their weight coefficients. The simple arithmetic mean of the experts' final estimates characterizes the market volume
Commission method	A group of organization specialists, industry experts makes an agreed decision regarding the possible value of the market volume
Delphi method	Reusable individual expert interviews. The estimates obtained during the first survey are provided to each expert in order to refine his individual assessment, taking into account the opinions of other experts. Opinion clarification procedures are carried out until the spread of opinions of all experts corresponds to a predetermined value of their variance. The final score is the average of individual expert opinions

Expenditure method (method of standard consumption).

This method consists in summing the product consumption rates multiplied by the number of consumers.

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

Capacity of the Ukrainian beer market in natural terms \u003d 48 million x 10 liters \u003d 480 million liters.

Provided that the average cost of a liter of beer \u003d 1.5 hryvnia, then the capacity of the Ukrainian beer market in monetary terms \u003d 480 million x 1.5 hryvnia \u003d 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 residents of the study region is calculated. Then the result is adjusted for the unsaved share of the population's income, then - for the share in the population's expenditures corresponding to the project of the commodity group or subgroup. The 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 calculation is based on the annual turnover of one of the market players working with similar goods. Some of them publish in the press the results of their work, indicating even their market share. To find data on the size of the local market, the result must be adjusted 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 development in another region, but 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 is pessimistic.

Extrapolation.

Historical data are extrapolated based on 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 a lot of money, the market size can be calculated by directly adding 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 sites on the Internet, you can collect very accurate information about all projects in this industry for the reporting period.

Statistics and credentials.

Exclusive

Often the 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 attached to all POS terminals during the sale, which certifies that this type of POS is approved 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 per year, then multiplying the number of stamps by the average cost of the POS, we get the market size and our share in it (according to our own sales).

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

All companies selling software on the platform Lotus Notesbuy licenses for Lotus from IBM (the manufacturer of this platform). Therefore, IBM has all sales for this region. The market size is multiplied by the number of Lotus licenses sold by the average software cost.

Public data

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

Some industry associations and statistical bodies collect and publish information on the overall sales of their industries.

However, such statistics can be very inaccurate. Most Russian companies never provide accurate information on the volume of services produced or sold (double-entry bookkeeping, left-handed income, etc.) and in every possible way tries to bypass the existing rules (no matter what it concerns - customs, accounting, or something else). Therefore, in Russia it is hardly possible to say that you have accurate information about the market or about any company (unless it is about a market where there are only a very limited number of 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 the promotion of finished products than to research requiring high-quality initial data. Serious quantitative research is time consuming and costly and is not justified for every company. Therefore, marketers often estimate the market offhand using expert judgment. However, with the development of information technology and the proliferation of CRM systems for quantitative research, more and more opportunities appear.

LITERATURE

1. Materials of the training course for the retraining program in marketing // State University of Management "RIMA", 2002.
2. F. Marketing Management Millennium. 10th ed. - SPb., M., Kharkov, Minsk: - Publishing house "Peter", 2000.
3. Avdeev V.Yu. Application of sampling methods in audit. http://www.audit-it.ru/viborka.php?foprint\u003d1.
4. Haig P., Haig N., Morgan K. Marketing research in practice: Basic methods of market research. - Ballance Business Books, 2005.
5. Anurin V., Muromkina I., Evtushenko E. Marketing research of the consumer market: Unique domestic experience / Study guide. - SPb .: Publishing house "Peter Print", 2004.
6. Materials of the site http://marketing.spb.ru.