why is market share important

Why market share is important for growth: A guide for CPG brands

When you’re green, you grow; when you’re ripe, you rot. This well-known adage speaks to the marketing concept that the only way a company can survive is through continuous growth. There is no standing in place when it comes to the consumer packaged goods (CPG) industry.

market share for growth is important

One of the earliest and most effective forms of advertising for growth and brand awareness was word of mouth. A consumer would share information about a product and others would try it as a result. The arrival of social sharing platforms and technology has brought this old strategy into the digital age—and increased its impact. Yet, to understand why market share is important, you need to understand how it influences public perception of your brand.

Opinion is everything. Brands that have a large share of their target audience also have implicit consumer approval. New potential customers wonder, “Why is that brand so popular?’’ Often, this leads them to decide to try a product for themselves, thus increasing that brand’s market share.

Attempting to maintain your current market share is not sufficient for the health of your company as, over time, you will naturally lose consumers for any number of reasons, to include changing tastes, an aging population, and increased competition. Leveraging a strong market share growth strategy to drive continuous expansion can help your brand stay ahead of competitors—and avoid profit stagnation or rot. Market share is, unavoidably, crucial for growth.

Why Market Share Is Important for CPG Brand Growth

Growth breeds growth. That’s the simplest explanation of why market share is important for CPG brands to grow their audience. Avoiding complacency is key; no amount of market share should ever be enough. Stagnation or failure to grow can actually lead to a loss of market share, for many reasons such as:

  • Product obsolescence: Kodak, ironically, invented the very device which would lead to the downfall of the company. A Kodak employee, Steve Sasson, developed a prototype for a digital camera in 1975 and brought it to management. The company made the decision not to expand into the digital marketplace as, at the time, there was not a low-cost option to develop photos taken on digital devices. Instead, the company believed that their momentarily strong market share in the film-based photography sector would remain stable and that consumers would continue to prefer developing photos in a traditional manner. As such, Kodak guarded their market share for film-based photography, even as they watched that market disappear. This would lead to the eventual bankruptcy of Kodak.
  • New market entrants: New competitors in your product category can slowly snake out your market share if you’re not careful. In one study, it was noted that 9 out of 10 major brands lost market share to smaller companies or cheaper store brands in 2016. CPG brands that remain complacent with their current market share and fail to seek out new growth strategies stand a great risk of being usurped by smaller challenger CPG brands.
  • Aging consumers: Consumers don’t live forever. For instance, if a brand had decided to solely target Baby Boomers in the 90s, it would likely lose touch with the younger consumers and would eventually be needed to replace that target market. To manage this, brands must consistently grow their market share into new audiences.

CPG brands can’t become complacent in their current market share numbers. Instead, they need to leverage that market share to gain market share from their competitors. And technology is what makes this possible given today’s crowded store shelves.

Using Technology to Grow Market Share—and Your Brand

If your brand already owns significant market share, you have at your disposal the greatest tool necessary to reach new potential customers. This is especially true in the digital age as your loyal users can rapidly share information about your brand with a massive audience. There are more than a few ways to leverage technology and your current market share for growth including:

  • Social media presence: It’s estimated that 25% of customers who have a good experience with a brand will tell ten other people about it. Your most loyal users are also going to be the ones most willing to share your brand’s message with their family and friends. Encourage those consumers to share their experience with your brand online and you’ll be able to see growth from increased awareness of and trust in your brand.
  • Brand ambassadors: Potential brand ambassadors may already be a part of your user base—you just need to reach out to them. Seek out high ranking bloggers and contributors on social media platforms within your niche market and offer them products for review. A positive review from a powerful social media figure can help create tremendous buzz for your product.
  • Search engine optimization: When a consumer shares your website’s link in reference to a specific keyword, they make your brand the authority on that keyword. So, for example, say an individual wrote a blog about the best solutions for dry skin, and then linked to your skin cream as one of those best solutions. The search engine algorithm would recognize that relevance and increase your brand’s credibility because of it.
  • Third-party shopping apps: Third-party shopping apps can be a powerful way for you to capture more market share. Consumers who trust the app will be interested in the brands that provide offers and information within it. When new potential customers in your target audience use the app, they connect with your brand in a meaningful way that inspires trust and interest in your products.

Your current market share can be instrumental in whether or not your brand sees further growth and expansion into the future. Ask that your loyal users share information about your brand on social media, write a review, or recommend you to friends and family. And, use third-party apps to get the word out about your brand and capitalize on your market share to build your credibility.

The reason why market share gains for CPG brands are so vital is that they drive future growth. Over time, it is inevitable that your company will lose some market share to competitors, aging consumers, shifting loyalties, and new product innovations. You must be prepared to replace and outpace any potential losses by continuously growing your brand.

Shopkick helps brands grow their market share. Our partners use our platform to engage and gain new consumers. If you’re looking to reach a new audience via a mobile shopping app, contact our team today to learn more.

Image courtesy Jakub Jirsak



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Dima Volovik

EVP of Product and Engineering

Dima Volovik is the EVP of Product and Engineering at Trax Retail — Shopkick.

Dima Volovik is the accomplished product and engineering leader who led teams to deliver innovative and commercially successful e-commerce products, marketplaces, and enterprise solutions for Amazon, Comcast, Fandango, and Universal Music. Before joining Trax, Dima was the Director at Amazon, where he led product development and Engineering for Amazon Appstore and Amazon Prime Video, CTO at Fandango, and Paciolan, head of technology at Golf Channel/Golf Now, and Global VP of Direct to Consumer Technology at Universal Music Group. Dima’s expertise includes developing consumer products, marketplaces, and enterprise solutions.

Dima grew up in Baku, Azerbaijan, where he received his MS in Electrical Engineering from Azerbaijan Oil Academy, and he currently resides in Los Angeles, California, with his family.