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Market Share measures the proportion of the total market held by a business, product or brand. The formula for calculating Market Share is presented below
Market Share (%) = sales of the business, product or brand / total sales in the market
(Sales can be measured either in volume or value to calculate market share)
By measuring changes in Market Share the influence of variable factors such as economic growth are excluded, and the business is compared directly against its competitors, allowing us to judge more accurately the success or failure of the businesses marketing strategies.
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In 2000 British Airways introduced 'Club World' which offered a horizontal bed in business class. Market research had identified that customers wanted the opportunity to sleep when they were travelling in business class. Following product development the new flat bed seat was introduced on the London to New York Route in April 2000. British Airways then monitored changes in Market Share over the period Jan 2000 to Jan 2001 as shown below
Following the introduction of the 'Club World' bed in April 2000, British Airways Share of the market steadily increased. In March 2001 the Marketing Director of British Airways presented the above Market Share data as evidence of the success of this particular strategy.
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