If you are operating a consumer-facing business, probably you are already familiar with the market share of each of your products. Increasing market share translates directly into additional sales (provided you have the required inventory).
There seem to be a few ways of increasing market share, although I’m not sure how effective each is.
Increase Quality-to-Price ratio
Increasing quality and decreasing price both have a positive effect on market share. However, both of these measures subtract proportionately from your bottom line (higher priced raw materials and less profit per sale). I’m pretty certain that increasing quality-to-price ratio by 1% must increase market share by at least 1% in order for there to actually be an incentive to improve your products and lower prices. It does not look like inelasticity is being modelled.
Increase Brand
Increased brand also has a positive impact on market share. The amazing thing about brand is that it looks like a fairly fixed cost to raise it. Brand seems to have a global effect on all sales relating to your advertising campaigns. Once you reach a certain threshold of sales, you can probably get more out of increasing your brand (per dollar spent) than by increasing quality or reducing price. Expect big advertising wars between the biggest companies making a product.
The big question of brands is whether or not competing brands reinforce or undermine each other. If brands reinforce, sales of a product can be expected to increase globally as global advertising for that product increases. If brands undermine each other, global sales would remain the same, but sales of each brand would be reduced by the effectiveness of opponents’ brands.
