advertisement
Science News
from research organizations

Being the market leader is not everything

Date:
August 24, 2018
Source:
University of Cologne
Summary:
Building customer relationships and strengthening the brand are key to a company's financial success -- more so than being the market leader, a recent study shows.
Share:
advertisement

FULL STORY

The market share of a company does not have a strong influence on its financial performance, a new study in marketing at the Faculty of Management, Economics and Social Sciences of the University of Cologne shows. Companies should instead invest in building customer relationships and a strong brand. If the market share increases by 1%, the financial performance of companies only increases by 0.13% on average. To arrive at these results, the researchers examined the relationship between market share and financial profitability using 89 published studies from six different continents published between 1972 and 2017.

Other studies show a much stronger financial effect of other metrics, such as customer satisfaction and brand equity. In fact, customer relationships deliver six times the effect and the brand almost three times the effect of market share gains alone. Dr. Alexander Edeling from the University of Cologne and Professor Dr. Alexander Himme from Kühne Logistics University in Hamburg published their findings in their article, "When Does Market Share Matter? New Empirical Generalizations from a Meta-Analysis of the Market Share-Performance Relationship," in theJournal of Marketing.

"Many CEOs still consider market share to be the most important indicator of business success," says Edeling. "But in today's digital market, small companies can often produce cost-effectively and sell to a global audience. That allows them to compete with the industry's leading companies."

Together with his co-author, Edeling suggests distributing budgets accordingly. Slow and steady investments in the expansion of products, the improvement of customer service and the development of a brand with a potential target customer base are the key to the growth and future security of a company for the authors.

advertisement

Story Source:

Materialsprovided byUniversity of Cologne.注意:内容可能被编辑风格d length.


Journal Reference:

  1. Alexander Edeling, Alexander Himme.When Does Market Share Matter? New Empirical Generalizations from a Meta-Analysis of the Market Share–Performance Relationship.Journal of Marketing, 2018; 82 (3): 1 DOI:10.1509/jm.16.0250

Cite This Page:

University of Cologne. "Being the market leader is not everything." ScienceDaily. ScienceDaily, 24 August 2018. /releases/2018/08/180824101156.htm>.
University of Cologne. (2018, August 24). Being the market leader is not everything.ScienceDaily. Retrieved August 21, 2023 from www.koonmotors.com/releases/2018/08/180824101156.htm
University of Cologne. "Being the market leader is not everything." ScienceDaily. www.koonmotors.com/releases/2018/08/180824101156.htm (accessed August 21, 2023).

Explore More
from ScienceDaily

RELATED STORIES