STUDENTS' CORNER - 68
A company must always look out for increasing its market share lest it becomes stagnant, losing market positions to competitors. The task of increasing market share involves all the vital functions and areas of a business beginning from the product of the company to the very profitability. Let us see how a company can improve its market share.
There are some proven methods of increasing the market share of a company. The company has to focus on innovation; that is, it must get at some new ideas for its product. For example, if the company is producing bath soap, it must think of some new ideas for selling soap. And to get at a new idea, the company must have an alert sense of the market in terms of, say, the colour of the soap particularly of its competitors, the fragrance, the shape, the packing, the advertisement and its focus on the target, the pricing. It can change the colour of the soap in such a way that it is new, fresh and appealing. The vital thing to remember is: the change the company decides to introduce must be accepted by the customers and they must be ready to pay for it. In other words, any change introduced in the product must be seen as a welcome change by the customers who are all important for business. Any change favoured by the company but not viewed favourably by the customers is a good change; it is as innovation a failure. Significantly, through accepted innovation, the company must go ahead of its competitors. For this, the management of the company must watch closely the market trends and be alert to any idea of innovation that may come from any quarters, say, friends, news, technology and so on.
The company must be quick in its response to the customers, in fact quicker than any of its competitors. The quicker the response is to the customers, the greater the satisfaction is of the customer; the greater is the satisfaction of the customers, the more loyal are the satisfied customers and it means the more of business.
To retain the market share through satisfied customers, the company can make price adjustment which exercises an invariable appeal to the customers in general. Sometimes, undercutting may also be resorted to.
The company can also immediately respond to the market through promotion. It must set aside a fatter budget for promotional activities and advertisements; it will be able to capture a bigger market share through relevant and effective advertisements.So far, we have seen how a company can increase its market share. We move to study how production planning helps provide better environment.