Market Share and How to Compute it

What is Market Share?

Market Share is the proportion or percentage level of an individual company sales it makes within a certain period as compared to the total sale from all other companies operating in the same industry or sector.

Market Share is an indicator of how far reaching the marketing endeavors of the marketing department of an organization has achieved within a certain period.

How does Market Share work?

Market Share represents the level of demand of the product in question such that when the demand level is high the market share increases and when the demand declines, the market share also goes down.

How to compute market share of a product

The following sales data was extracted from the books of accounts of five companies in the same industry for the year five years ended 31/12/2020