Marketing Metrics

Metrics presentation
Market Share (revenue, unit & relative)
Market Penetration
Margin
Contribution Margin

Piotr Bartenbach
Victor Ituah

Market Share
Definition of the metric and the purpose for use
Metric
Revenue Market
Share

Unit Market
Share

Relative Market
Share

Definition
The percentage of an industry or
market's total sales that is earned
by a particular company over a
specified time period. Market
share is calculated by taking the
company's sales over the period
and dividing it by the total sales of
the industry over the same period.
A method of measuring market
share. A company will measure its
own market share with that of
its competitors to determine
relative market share.

Purpose
To measure
competitiveness.

To measure
competitiveness.

To assess
comparative market
strength.

Source: Marketing Metrics: The Definitive Guide to Measuring Marketing Performane, Paul W. Farris, Wharton School Publishing

Application conditions

Market must be properly defined and estimated

Data parameters must be carefully defined
Time-frame and measurement error must be established

Source: Marketing Metrics: The Definitive Guide to Measuring Marketing Performane, Paul W. Farris, Wharton School Publishing

Construction stages

Revenue Market Share

Construction

Sales revenue as a percentage of

market sales revenue.

Formula

Source: Marketing Metrics: The Definitive Guide to Measuring Marketing Performane, Paul W. Farris, Wharton School Publishing

Construction stages

Unit Market Share

Construction

The units sold by a particular company as a percentage of

total market sales, measured in the same units.

Formula

Source: Marketing Metrics: The Definitive Guide to Measuring Marketing Performane, Paul W. Farris, Wharton School Publishing

Construction stages

Relative Market Share

Construction

To assess a firms or a brands success

and its position in the market.

Formula

Source: Marketing Metrics: The Definitive Guide to Measuring Marketing Performane, Paul W. Farris, Wharton School Publishing

Examples of application
TV Advertising revenue market shares of TVN S.A.

Source: esphoneblog.com

Examples of application
Global Smartphone unit market share of Samsung Corporation
and its competitors

Source: esphoneblog.com

Results interpretation

Market share is an indicator of how well

a firm is doing against its competitors.
This metric, supplemented by changes in sales revenue, helps
managers evaluate both primary and selective demand in their
market.

Source: Marketing Metrics: The Definitive Guide to Measuring Marketing Performane, Paul W. Farris, Wharton School Publishing

Related metrics

Brand Development Index

Brand sales in a specified segment, compared with sales of that brand
in the market as a whole.

Category Development Index

Category sales in a specified segment, compared with sales of that
category in the market as a whole.

Market Penetration
Purchasers of a product category as a percentage of total population.

10

Source: Marketing Metrics: The Definitive Guide to Measuring Marketing Performane, Paul W. Farris, Wharton School Publishing

Margins
Definition of the metric and the purpose for use

Metric
Unit Margin ($)

Margin (%)

Definition

Purpose

Margin (on sales) is the difference

To determine the
between selling price and cost.
value of incremental
This
difference
is
typically
sales, and to guide
expressed either as a percentage
pricing and promotion
of selling price or on a per-unit
decisions.
basis.

11

Source: Marketing Metrics: The Definitive Guide to Measuring Marketing Performane, Paul W. Farris, Wharton School Publishing

Application conditions

Knowing what is an unit.

12

Source: Marketing Metrics: The Definitive Guide to Measuring Marketing Performane, Paul W. Farris, Wharton School Publishing

Construction stages

Unit Margin

Construction

Unit price less the unit cost.

Formula

13

Source: Marketing Metrics: The Definitive Guide to Measuring Marketing Performane, Paul W. Farris, Wharton School Publishing

Construction stages
Margin (%)

Construction

Unit margin as a percentage of unit price.

or
Total sales revenue minus Total cost to Total sales revenue.

Formulas

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Source: Marketing Metrics: The Definitive Guide to Measuring Marketing Performane, Paul W. Farris, Wharton School Publishing

Examples of application
iPhone 4 Unit Margin

15

Source: esphoneblog.com

Results interpretation

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Related metrics

Channel Margins
Channel profits as percentage of channel selling price.

Average Price per Unit

Total revenue divided by total unit sales.

Contribution Margin
Contribution per unit divided by unit price.

Break-Even Sales Level

For unit breakeven: divide fixed costs by contribution per unit.
For revenue breakeven: divide fixed costs by contribution margin (%).

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Source: Marketing Metrics: The Definitive Guide to Measuring Marketing Performane, Paul W. Farris, Wharton School Publishing