2.

1 Market Share
Market share is the percentage of a market (defined in terms of either units or revenue)
accounted for by a specific entity.

Market Share: The percentage of a market accounted for by a specific entity. Unit Market
Share: The units sold by a particular company as a percentage of total market sales,
measured in the same units.
Revenue Market Share: Revenue market share differs from unit market share in that it
reflects the prices at which goods are sold. In fact, a relatively simple way to calculate
relative price is to divide revenue market share by unit market share.
Unit Market Share is also known as Volume Share. Revenue Market Share is also
known as Value Share. Marketers need to be able to translate sales targets into market share
because this will demonstrate whether forecasts are to be attained by growing with the market
or by capturing share from competitors. The latter will almost always be more difficult to
achieve. Market share is closely monitored for signs of change in the competitive landscape,
and it frequently drives strategic or tactical action.
Example: The market for confectionery in Hanoi of 3 players in 12/2020 is shown as table
below:
Company Units sold (million packages) Revenue (million VND)
Hai Ha 3 60,000
Kinh Do 5 100,000
Bibica 2 40,000
Hai Ha’s unit market share:
(unit sales ) 3
Hai Ha’s unit market share = = =33 %
Total market unit sales 10

Sales revenue 60000

Hai Ha’s revenue market share = = =33 %
Total market sales revenue 200000
2.2 Relative Market Share and Market Concentration
Relative market share indexes a firm’s or a brand’s market share against that of its leading
competitor.

Example: The market for confectionery in Hanoi of 3 players in 12/2020 is shown as table
below:
Company Units sold (million packages) Revenue (million VND)
Hai Ha 3 60,000
Kinh Do 5 100,000
Bibica 2 40,000

sales revenue 100000

Largest competitor’s market share = = =50 %
Total market sales revenue 200000

'
Hai H a s market share 33 %
Relative market share = '
= =66 %
Kinh D o s market share 50 %

2.3 Brand Development Index and Category Development Index

The brand development index (BDI) quantifies how well a brand is performing within a
specific group of customers, compared with its average performance among all consumers.

The category development index (CDI) measures the sales performance of a category of
goods or services within a specific group, compared with its average performance among all
consumers.

Example: In Hanoi, among households without children, Hai Ha sales run one packet per
week per 60 households. In the general population, its sales run one packet per week per 30
households. This translates to 1/60 of a packet per household in the childless segment, versus
1/30 of a packet in the general populace.

1
60
BDI = =0.5
1
30

2.4 Penetration
Penetration is a measure of brand or category popularity. It is defined as the number of
people who buy a specific brand or a category of goods at least once in a given period,
divided by the size of the relevant market population.
Penetration: The proportion of people (households) in the relevant population who bought
(at least once in the period) a specific brand or a category of goods.

Example: In this month, 750 of the 3,000 households in Hanoi purchased Sweet-flavoured
Candy, and 2,250 bought any kind of confectionarial product, including Sweet-flavoured
Candy.
Hai Ha’s market penetration = 750/3000 = 0.25 = 25%
Hai Ha’s brand penetration = 2250/3000 = 0.75 = 75%
Hai Ha’s penetration share = 750/2250 = 33%
Example 2: Hai Ha Kotobuki brand has a market share in Hanoi of 30%, a usage index of
0.75 and a share of requirements of 50%. From these data, we can calculate the penetration
share for Hai Ha in Hanoi.
30 %
Hai Ha’s penetration share: =80 %
0.75 x 50 %

2.5 Share of Requirements

Share of requirements, also known as share of wallet, is calculated solely among buyers of a
specific brand. Within this group, it represents the percentage of purchases within the
relevant category, accounted for by the brand in question.
Share of Requirements: A given brand’s share of purchases in its category, measured solely
among customers who have purchased that brand. Also known as share of wallet.

Example: In a given month, the unit purchases of Hai Ha ran 40,000 packages. Among the
households that bought Hai Ha, total purchases came to 200,000 packages.
Unit Share of Requirement = 40000/200000 = 20%

Example 2: Hai Ha Kotobuki brand has a market share in Ho Chi Minh City of 25%, a usage
index of 0.75 and a penetration share of 75%. From these data, we can calculate the share of
requirement of Hai Ha in Ho Chi Minh City.
25 %
Share of requirement = =44 %
0.75 x 75 %