This article evaluates the dynamic interaction of market share and profit. The determinants of market share are compared with published empirical research and illustrated in a consumer product industry. The effects of market growth, maturity and decline, competitive attack, price leadership, and heavy user strategies on market share and profit are analyzed theoretically and simulated over a 10-year period.
AndersonPaul F. (1980), “Market Share, ROI, and the Market Value Rule,”Theoretical Developments in Marketing, LambCharles W.Jr., and DunnePatrick M., eds., Chicago: American Marketing, 91–95.
3.
BagozziRichard P. (1984), “A Prospectus for Theory Construction in Marketing,”Journal of Marketing, 48 (Winter), 11–29.
4.
BarnettArnold I. (1976), “More on a Market Share Theorem,”Journal of Marketing Research, 13 (February), 104–109.
5.
BeckwithNeil E. (1972), “Multivariate Analysis of Sales Responses of Competing Brands to Advertising,”Journal of Marketing Research, 9 (May), 168–176.
6.
BoydHarper W. (1973), “Market Share as a Critical Determinant of Corporate Strategy,” unpublished working paper, Stanford University.
7.
BrodieRoderick, and de KluyverCornelis A. (1984), “Attraction versus Linear and Multiplicative Market Share Models: An Empirical Evaluation,”Journal of Marketing Research, 21 (May), 194–201.
8.
BuzzellRobert D. (1964), “Predicting Short-Term Changes in Market Share as a Function of Advertising Strategy,”Journal of Marketing Research, 1 (August), 27–31.
9.
BuzzellRobert D., GaleBradley T., and SultanRalph G. M. (1975), “Market Share—A Key to Profitability,”Harvard Business Review, 53 (January/February), 97–106.
10.
CavesR. E., GaleB. T., and PorterM. E. (1977), “Interfirm Profitability Differences: Comment,”The Quarterly Journal of Economics, 91 (November), 667–673.
11.
ClarkeDarral G. (1973), “Sales-Advertising Cross-Elasticities and Advertising Competition,”Journal of Marketing Research, 10 (August), 250–261.
12.
CookVictor J. (1971), “The Economic Meaning of Marketing Communications,” unpublished working paper, University of Chicago.
13.
CookVictor J. (1983), “Marketing Strategy and Differential Advantage,”Journal of Marketing, 47 (Spring), 68–75.
14.
CookVictor J. (1985), “Understanding Marketing Strategy and Differential Advantage,”Journal of Marketing, 49 (Spring), 137–142.
15.
DayGeorge S., ShockerAllan D., and SrivastavaRajendra (1979), “Customer-Oriented Approaches to Identifying Product-Market Strategies,”Journal of Marketing, 43 (Fall), 8–19.
16.
Gavin-Jobson Associates (1982), The Wine Marketing Handbook, New York: Gavin-Jobson Assoc.
17.
GhoshAvijit, NeslinScott, and ShoemakerRobert (1984), “A Comparison of Market Share Models and Estimation Procedures,”Journal of Marketing Research, 21 (May), 202–210.
18.
HamermeshR. G., AndersonM. J.Jr., and HarrisJ. E. (1978), “Strategies for Low Market Share Businesses,”Harvard Business Review, 56 (January/February), 95–102.
19.
HanssensDominique M. (1980), “Market Response, Competitive Behavior, and Time Series Analysis,”Journal of Marketing Research, 17 (November), 470–485.
20.
HendersonBruce D. (1979), Henderson on Corporate Strategy, Cambridge, MA: Abt Books.
21.
HorskyDan (1977), “Market Share Response to Advertising: An Example of Theory Testing,”Journal of Marketing Research, 14 (February), 10–21.
22.
HoustonFranklin S., and WeissDoyle L. (1974), “An Analysis of Competitive Market Behavior,”Journal of Marketing Research, 11 (May), 151–155.
23.
HuntShelby D. (1983), “General Theories and the Fundamental Explananda of Marketing,”Journal of Marketing, 47 (Fall), 9–17.
24.
ResearchImpact (1984), Beverage Trends in America 1960–2000, New York: M. Shanken Communications, Inc.
25.
JacobsonRobert, and AakerDavid A. (1985), “Is Market Share All That It's Cracked Up To Be?,” unpublished working paper, University of California, Berkeley.
Leading National Advertisers (1981), Ad $ Summary, New York: LNA, Vol., 9.
30.
LeeflangPeter S. H., and ReuylJan C. (1984), “On the Predictive Power of Market Share Attraction Models,”Journal of Marketing Research, 21 (May), 211–215.
31.
McGuireTimothy W., and WeissDoyle L. (1976), “Logically Consistent Market Share Models II,”Journal of Marketing Research, 13 (August), 296–302.
32.
McGuireTimothy W., and WeissDoyle L., FarleyJohn U., LucasRobert E.Jr., and Winston RingL. (1968), “Estimation and Inference for Linear Models in which Subsets of the Dependent Variable Are Constrained,”American Statistical Association Journal, 63 (December), 1201–1213.
33.
MoriartyMark (1975), “Cross-Sectional, Time-Series Issues in the Analysis of Marketing Decision Variables,”Journal of Marketing Research, 12 (May), 142–150.
34.
NaertPhilippe A., and BultezAlain (1973), “Logically Consistent Market Share Models,”Journal of Marketing Research, 10 (August), 334–340.
35.
NaertPhilippe A., and WeverberghM. (1981), “On the Prediction Power of Market Share Attraction Models,”Journal of Marketing Research, 18 (May), 146–153.
36.
PhillipsLynn W., ChangDae R., and BuzzellRobert D. (1983), “Product Quality, Cost Position, and Business Performance: A Test of Some Key Hypotheses,”Journal of Marketing, 47 (Spring), 26–43.
37.
PolliRolando, and CookVictor J.Jr. (1969), “Validity of the Product Life Cycle,”Journal of Business, 42 (October), 385–400.
38.
PorterMichael E. (1980), Competitive Strategy: Techniques for Analyzing Industries and Competitors, New York: The Free Press.
39.
PrasadV. Kanti, and Winston RingL. (1976), “Measuring Sales Effects of Some Marketing Mix Variables and Their Interactions,”Journal of Marketing Research, 13 (November), 391–396.
40.
RumeltRichard P., and WensleyRobin C. (1981), “Market Share and the Rate of Return: Testing the Stochastic Hypothesis,” working paper, University of California, Los Angeles.
41.
SchultzRandall L. (1971), “Market Measurement and Planning with a Simultaneous-Equations Model,”Journal of Marketing Research, 8 (May), 153–164.
42.
Simmons Market Research Bureau (1981), Survey of Media & Markets: Malt Beverages & Wine, New York: Simmons.
43.
SimonJulian L. (1969), “The Effect of Advertising on Liquor Brand Sales,”Journal of Marketing Research, 6 (August), 301–313.
44.
TelserLester G. (1962), “Advertising and Cigarettes,”The Journal of Political Economy, 70 (October), 471–499.
45.
UtseyMarjorie F., and CookVictor J. (1984), “A Marketing Strategy Paradigm for Case Analysis,” in 1984 AMA Educators’ Proceedings, BelkR., eds., Chicago: American Marketing, 96–100.
46.
WebsterFrederick E.Jr., LargayJames A.III, and StickneyClyde P. (1980), “The Impact of Inflation Accounting on Marketing Decisions,”Journal of Marketing, 44 (Fall), 9–17.
47.
WeissDoyle L. (1968), “Determinants of Market Share,”Journal of Marketing Research, 5 (August), 290–293.
48.
WildtAlbert R. (1974), “Multifirm Analysis of Competitive Decision Variables,”Journal of Marketing Research, 11 (February), 50–62.
49.
WindYoram, and MahajanVijay (1981), “Market Share: Concepts, Findings, and Directions for Future Research,”Review of Marketing, EnisB. M., and RoeringK. J., eds., Chicago: American Marketing, 31–42.
50.
WittinkDick R. (1977), “Exploring Territorial Differences in the Relationship between Marketing Variables,”Journal of Marketing Research, 14 (May), 145–155.
51.
WooCarolyn Y., and CooperArnold C. (1982), “The Surprising Case for Low Market Share,”Harvard Business Review, 60 (November-December), 106–113.
