Week 2 Market Share, Brand Penetration Share, Awareness

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Questions and Answers

What does market share indicate about a company, brand, or product?

The profitability of the company as a whole.
The overall market price for products in that segment.
The percentage of the market attributed to the company compared to competitors. (correct)
The total sales generated by the company.

How is market share expressed in terms of units sold?

As a percentage of total market unit sales. (correct)
As a comparison of sales growth over time.
As a dollar amount.
As a ratio of price to cost.

Why might a company choose to lower its prices?

To increase profits immediately.
To align with the industry’s standard pricing.
To gain a larger market share even at the expense of profits. (correct)
To discourage new competitors from entering the market.

What is a crucial step when calculating market share in units?

Ensuring the definition of 'market' fits the information needed. (A) Signup and view all the answers

Which of the following directly impacts market share evaluation?

Company price strategies and distribution channels. (A) Signup and view all the answers

What does a high market share often suggest about a company's product?

The product is experiencing high consumer demand. (A) Signup and view all the answers

Which of the following best defines penetration share?

A measure of a product's market entry success. (D) Signup and view all the answers

What does awareness represent in the context of marketing?

The percentage of potential customers who have heard of a brand (A) Signup and view all the answers

Which stage of the Awareness Hierarchy indicates that a brand is remembered when a product category is identified?

Brand Recall (A) Signup and view all the answers

In the Peanut Butter Experiment, how did the recognition of Brand B affect its preference?

It decreased preference despite being inferior (D) Signup and view all the answers

Which element is NOT part of the Awareness Hierarchy?

Brand Loyalty (C) Signup and view all the answers

Why is brand awareness crucial for marketers?

It facilitates movement towards purchase decision (A) Signup and view all the answers

How is Unit Market Share calculated?

Company Sales / Total Market Sales (B) Signup and view all the answers

What is the main focus when calculating Dollars Market Share?

Sales in dollars compared to total market sales in dollars (D) Signup and view all the answers

What needs to be defined carefully in the context of market share calculations?

The time period and market scope (C) Signup and view all the answers

Which of the following is a challenge in calculating market share?

Discrepancies in sales reporting levels (B) Signup and view all the answers

How does market share growth typically occur?

By growing at the expense of competitors (B) Signup and view all the answers

What does Penetration Share help marketers understand?

Percentage of category buyers who purchased their brand (C) Signup and view all the answers

How can Category Penetration be defined?

The number of consumers purchasing from the category divided by market size (C) Signup and view all the answers

What happens when a company increases sales but its market share remains constant?

The market is growing (C), Competitors are also increasing their sales (D) Signup and view all the answers

Why is brand awareness important in marketing?

It helps in distinguishing products from competitors (B) Signup and view all the answers

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Study Notes

Market share is the percentage of a market that a specific company, brand, or product accounts for.
It is calculated by dividing our sales by the total sales of the market.
Market share is important for understanding how well a company, brand, or product is performing against its competitors.
Market share can indicate the viability of a product or brand and future opportunity for success.
Companies that are in established and stable industries often share their data to have access to market share data.
Companies sometimes lower their prices to buy market share.

It is the number of units sold by a specific company as a percentage of total market unit sales.
Always expressed as a percentage.
Formula: (# of units sold) / (# of units sold by the total market) X 100.
When calculating Units Market Share, be careful to define the "market" in a way that best fits the information needed, make sure to use the same timeframe for unit sales and the total market's unit sales, and ensure that the same products are being compared (e.g., "women's apparel" vs. "young contemporary").

It is the sales in dollars of a specific company as a percentage of dollar sales in the market.
Always expressed as a percentage.
Formula: (sales in dollars) / (dollar sales of the total market) X 100.
When calculating Dollars Market Share, be careful to define the "market" in a way that best fits the information needed, make sure to use the same timeframe for unit sales and the total market's unit sales, and ensure that the same products are being compared (e.g., "women's apparel" vs. "young contemporary").

It is important to include all relevant companies in the "market" when calculating market share.
It is essential to ensure that reliable data is available from all competitors.
Be sure to measure company sales and market sales at the same level in the distribution channel.
Measuring over a short period of time can provide a different understanding compared to measuring over a longer period of time.

Sales growth does not always translate into market share growth because the market itself can be growing.
Sales growth and market share growth happen together when one company grows at another's expense.

Category Penetration & Brand Penetration

Category Penetration measures the number of consumers who purchase products from the category at least once in the defined time period, divided by the number of consumers in the market.
Brand Penetration measures the number of consumers who purchase a specific brand at least once in the defined time period, divided by the number of consumers in the market.
Both metrics describe performance in terms of consumers (not units or dollars).
Category Penetration is useful in understanding the acceptance of new product categories.
Brand Penetration measures brand acceptance among a defined population of consumers.

Penetration Share is calculated by dividing Brand Penetration percentage by Category Penetration percentage, then multiplying by 100.
It tells marketers the percentage of category buyers who bought their brand.

Awareness

It is the percentage of potential customers who have heard of a brand.
Awareness is critical in moving the target audience towards purchase.
Awareness is always expressed as a percentage.
Formula: (# of people aware of a brand) / (total # of people in the market) X 100.

Awareness Hierarchy

Marketers want to move their brand's awareness up this ranking:
- Brand Dominance: If only 1 brand is named.
- Top of Mind Brand: First brand named.
- Brand Recall: Brands named when the product category is identified.
- Brand Recognition: Brand comes to mind when its name is presented.
Research has shown that familiar brands are preferred by customers, even when the awareness is limited to "heard of it."

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