weak position.

If the largest competitor had a share of only 5%, the ratio would be
4:1, implying that the brand owned was in a relatively strong position, which might
be reflected in profits and cash flows. If this technique is used in practice, this scale
is logarithmic, not linear.

Frequency
Usually measured annually but perhaps more frequently in fast-moving markets.

Source of the data

The figures required to calculate the relative market share of a company can usually
be sourced from annual reports or market research that has been carried out.

Cost/effort in collecting the data

Costs and effort for collecting market share can be very high, especially in those
cases where no good-quality data are available and market research has to estab-
lish baseline data. Benchmark data are available in many industries but this can
also be expensive. The lowest costs for collecting data are incurred when the data
are readily available.

Target setting/benchmarks
Targets can be gleaned from existing market research. Benchmarks can be gleaned
from articles etc. that explain how other organisations secured high relative market
share positions.

Example Consider the following example concerning small urban cars. As a

starting point for making the relative market share calculation, we describe the
performance of the key players:

Units sold Revenue (thousands Market

(thousands) of US dollars) share

Zipper 25 375,000 40%

Twister 10 200,00 21.3%

A-One 7.5 187,500 20%

Bowlz 5 125,000 13.3%

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2 8 R EL AT I V E M A R K ET S H A R E 135