CHIEF MARKETING OFFICERS (CMO'S) SHOULD HAVE MARKET SHARE QUOTA'S (AND BE JUDGED ON THEIR ABILITY TO ACHIEVE THEM)

There are three market share metrics that when aggragated can be used to gauge the effectiveness of your CMO and all marketing activities. These metrics are the volume, value and vector of your market share.

1. VOLUME. Market share volume is the traditional notion of share measured in dollars or units relative to your competition. While volume is a good initial indicator, marketers need to know the value of this share and the trend of their share.

2. VALUE. Market share value attachs a quantitative value, measured by percentage margin, to your market share volume. Having a large share of an unprofitable market is not sustainable. Alternatively, holding a smaller share that is profitable may be sustainable.

3. VECTOR. Market share vector is a trend measurement that depicts the direction your market share volume and value are heading, over time, relative to your primary and secondary competitors. The vector has a starting point, at least one intermediate measurement point and an ending point, typically the conclusion of a campaign, or performance review date of a CMO.

Market share vectors unambiguously measure enterprise success relative to it's peers. The primary function of market share vectors is to gauge the effectiveness of your marketing activities and the performance of your CMO. Market share vectors are the CMO's version of quota's, which sales reps are generally evaluated on (yes, I am saying that CMO's should have market share quota's and be judged on their ability to hit them). A few more comments on market share vectors:

1. Timing. Market share vectors can be used to judge effectiveness over a multi-year career, a multi-month campaign or as part of an annual review of budgets and plans. The vector requires a starting point at which all competitors are measured, an intermediate point and a concluding point that will be used to determine the vector trend.

2. Scaling. For start-ups or small firms with very small share, market share vectors can be scaled down so as to meaningfully measure actual performance. To scale down market share vectors simply select a subset of customers, territories, segments or categories and measure your relative share within that limited arena.

3. Influences. Poor vector performance may be due to influences outside the realm of control of marketing and the CMO. But the same thing applies to sales reps... there are many influences from quality, to shipping, to design decisions that a sales rep must live and die with, in their efforts to achieve a quota. The stark reality generated by market share vectors needs to be tempered within the context of issues, problems and opportunities faced by the enterprise and by the CMO. Market share vectors set up a baseline framework from which a CEO or CFO might begin to understand the effectiveness of their CMO and their marketing activities.

4. Intelligence. Some enterprises do not have the competitive data necessary to measure market share vectors. Others may not have the will or the interest to generate competitive intelligence. To the former, they need to begin the process of establishing a competitive intelligence competency... market share vectors are a great way to begin. Regarding the latter, enterprises without the will or interest need to understand the importance of external metrics and the peril they place themselves in when they operate without these guide posts.

We have a simple Excel worksheet you can use to plot market share vectors. Shoot me an email and I'll send you the worksheet.

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Comments

[Neha N.]

There is also another dimension to this situation which is applicable to 'High End Lifestyle Men's Apparels Market in India'.

The twins parameters of Market Size and Market share could be marked. But plotting the vector ought to be mutidimensional... Because the target groups are like isolated subsets having their own Economics. So the fourth dimension of "Target Market Subset" comes into play.

BEst Regards
Neha N