The market share of a company and its products is one of the most important business indicators. There are independent specialized firms that develop market share studies per industry / category / product, and a commercial manager works intensely with such companies, studies, figures.
But what can you do as a business manager if you do not have market share studies? How do you elaborate your goals and business strategy?
As Commercial Manager at Veteco, a company importing and distributing Merial’s veterinary products in Romania, in 2010 I was faced directly with such a situation in the Frontline Combo / Frontline external anti-parasitic products management.
Although it may seem surprising, at that time on the veterinary market in Romania there were no market share studies. At one point, it was an initiative for starting a market share survey with clear benefits for all contributors, but this study was not implemented due to the fact that some important companies did not show interest to contribute with information, figures. So the results of any study would have been invalidated / distorted if only some of the players had participated in the study.
In this context, I decided to develop an in-house study that would give us a representation of the Frontline Combo / Frontline market share even if the error margin exceeded the level of the studies conducted by the specialized companies.
I developed the in-house study as described in the process below.
a) Setting the Objectives
Obtaining market shares (quantitative) for three product groups:
- Frontline + Frontline Combo from Merial
- Advantix from Bayer – the main competitor
- Generics (other competitors having generic products similar to those mentioned above),
Obtaining market shares per total market, respectively per distribution channel: veterinary (cabinets, pharmacies) and pet shops.
b) Setting the Universe
We have included several hundreds of veterinary practices and pharmacies and pet shops, number that ensured market relevance.
c) Setting the Methodology & Questionnaire
Veteco’s sales agents visited all the clients included in the universe, and together they filled in the below questionnaire, a document I specially developed for this project.
This document had as goals:
– a qualitative evaluation by profiling the customers
-a quantitative evaluation as the clients estimated in percent their sales to pet owners for all 3 product groups in one year period.
For example: Frontline 50%, Advantix 30%, Generic 20%. Or Frontline 30%, Advantix 50%, Generic 20%.
d) Data processing
In this way, we centralized the estimated sales data across the three groups for several hundred customers, at the level of both segments (veterinary and pet shops).
For these customers, Frontline product sales made by Veteco at the level of one year were in our internal system. Consequently I was able to extrapolate for each client the sales made by these clients for the other product groups (Advantix, Generics).
For example, if Veteco sold 500 Frontline to client A in one year and client A mentioned that his sales to the pet owners had the mix of 50% Frontline, 30% Advantix, 20% Generics, it resulted that client A actually sold 1000 products with the following mix: 500 Frontline + 300 Advantix + 200 Generics.
In this way by extrapolating the sales per customer and per each product group, I was able to define the market shares of the three product groups per total market and segments (veterinary and pet shop).
As the hundreds of clients accounted for nearly 90% of Veteco Frontline total sales, the study was representative even if the approach was empirical. And even if the numbers were not accurate at all, at a relative level this study gave us a real picture of the market, even if this image was more or less blurred. But what do you prefer? Lack of data or a blurred image?
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