What is the Market Share by Volume? Definition & Calculation Formula


Comparing your company’s sales volume with the total sales volume in the market is undoubtedly an important indicator that helps you develop your business.

Market share by volume refers to the number of sales a company sells of a particular product relative to the total volume of sales of the same product in the market or in the industry in which the company operates. This index is calculated over a specific period, usually a year.

Sales volume is one of the essential vital indicators for your company. We will help you to understand the most important details of this topic simply and sufficiently. Let’s start

What does the market share by volume means?

You can deduce from the market share by volume the following information:

  • This indicator represents the company’s size compared to the total size of the market.
  • The production capacity of your company compared to competing companies.
  • The marketing ability of your company compared to other companies in the market.
  • The quality of your product and its suitability to the customer’s capabilities compared to other products in the market.

These are the most important indications of the volume market share index. 

By analyzing the market depending on these indications, you can develop more information and details about your company’s position in its market.

Importance of market share by volume

This indicator is important in several ways, for example:

  • Company owners can monitor their company’s level in the market and how effective its management team is.
  • It is important for the company’s management to determine the company’s departments’ performance level, for example, the marketing department, production, and quality.
  • Investors check the market share by volume before investing in any company on its size in the market compared to its competitors.

How is the market share by volume calculated?

The company’s market share by volume is calculated as a percentage of the total market size as follows:

1- Determine the period for calculating your company’s market share in the market; let it be the previous year.

2- Calculate your company’s sales volume; how many units did you sell in the specified period?

3- Collecting information about all units sold from the same product during the same period in the market. You usually find such information in research centers, chambers of commerce, etc.

4- Use this formula to calculate market share:

The market share by volume = (the company’s sales unit / total market sales unit) * 100.

In this way, you can calculate the market share by volume for your company.

How to increase the market share by volume?

You can increase the market share by volume in the following ways:

  • Reduce the price of the product. Which increases the demand for it
  • Increase your marketing campaigns
  • Opening new markets in other geographic areas
  • Increase the quality of the product and making it more suitable for the preferences of customers.

The previous points are how you can increase your sales volume and get a larger market share by volume.

What are the other types of market share?

You can determine the market shares of your company in different shapes. 

Therefore, you can measure your company’s market share in several types. Each type of market share has a specific meaning, and you can obtain different information from it. 

The following are the most important types of market shares that help you measure your company’s performance:

Conclusion

Market share in terms of size is one of the most important indicators that measure your company’s performance compared to competing companies.

Market share in terms of volume is the number of sales that a company sells relative to the total sales of the same product in the market or the industry in which the company operates. This index is calculated over a specific period, usually a year.

This indicator shows the size of the company in the market and the volume of its production. It also indicates the production and marketing capacity of the company in general.

You can calculate the market share by volume through this equation:

Market share by volume = (company’s sales volume / total market sales volume) * 100.

You need to calculate this indicator during a specific period. Your company’s sales volume during a particular period and the market’s sales volume as a whole also during the same period. 

Also, you can determine your company’s market share in several types, and each type has a specific meaning. And the information which you can obtain from these types is different from each other.


Source:

Market Share

Market share growth

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