excellent source for Industry Profiles and Company Reports. https://pitt.libguides.com/industryresearch. Consumer Reports provides "evidence-based product testing and ratings. Includes data and analysis of industries, companies, stocks, bonds, mutual funds, indexes, and current news. For instance, a small competitor selling frequently purchased, differentiated consumer products can achieve satisfactory results with a small share of the market. Because of the great difficulty of computing meaningful relative price-index numbers, the measure we used here is rather crude. Neither the PIMS study nor any other empirical research can lead to a formula for these strategic choices. The figures shown in Exhibit II are averages of the differences between the superior quality and the inferior quality percentages. Thus it is impossible to determine which is greaterthe price premiums earned by market leaders, or the differential in the quality of their products. Market leaders enjoyed rates of return about three quarters of a point higher when they allowed market share to decline than when they maintained it over the period 19701972. Some free information- requires registering to receive PDFs. However, this observation is subject to some qualification. The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy. These explanations of why the market-share/profitability relationship exists are not mutually exclusive. Free for a limited time! Best Customers is a unique look at who the best and biggest customers are for hundreds of individual products and services. Deloitte offers industry prediction reports for state government, banking and securities, commercial real estate, energy and resources, insurance, payments, process and industrial products, renewable energy, retail and talent strategies industries. It looks like you're using Internet Explorer 11 or older. This convincing evidence of the relationship itself, however, does not tell us why there is a link between market share and profitability. By definition, a holding strategy is designed to preserve the status quo. Data is easily exportable for analysis. The page answers frequently asked questions about NAICS codes, provides a NAICS code look-up search feature, and an email contact for further questions and help with identifying codes. Access current and historical census data and demographic information. Ethnicities include: African American/Caribbean/African; Arab/Middle Eastern; Asian/Pacific Islander; European/Eastern European; Hispanic; Jewish; Native People. This link will take you to the U.S. Census Bureau's new data search and download site. Recognition of this relationship will affect how managers decide whether to make or buy to decrease purchasing costs, whether to advertise in certain media, or whether to alter the price or quality of a product. Many programs also produce additional industry detail, including state and regional data. Guide to resources for course assignments. Search for an industry in the search box in the middle of the page. The experience of the businesses in the PIMS data pool, summarized in Exhibit VI, indicates that only large-share businesses are generally able to harvest successfully. Thus the data used to measure market size and growth rates cover only the specific products or services, customer types, and geographic areas in which each business actually operates. On the average, a difference of 10 percentage points in market share is accompanied by a difference of about 5 points in pretax ROI. The Schick example is, no doubt, an extreme one. But the data in Exhibit II show little or no connection between manufacturing expense, as a percentage of sales, and market share. Enables users to quickly create professional-quality thematic maps and reports using demographic, business, and marketing data. For established businesses in relatively mature marketswhich is to say, for the majority of businesses in advanced economiesholding is undoubtedly the most common strategic goal with respect to market share. These objectives have much to do with the rate of return that can reasonably be budgeted in the short and long runs, as well as the capital requirements and cash flow of a business. We typically do not have access to these types of reports at Pitt, but it can be helpful to read the table of contents or preview they provide to help steer you in the right direction for additional information. Schicks campaign to build sales of the Flexamatic electric shaver during 1972 and 1973 dramatically illustrates the cost of increasing market share. Features market research & industry news from 1993 to present, covering many facets of the sports industry (sporting goods, equipment sales, participation, facilities, broadcasting, sponsorship & marketing.). To some degree, a large-share business may benefit from all three kinds of relative advantages. Of course, these comparisons also reflect the influence of factors other than strategic choice. offers industry research reports covering over 900 industry segments, including in-depth international industry information. Why do profit margins on sales increase so sharply with market share? As you search these databases watch for data such as the size of the market in dollars (ex: "the $5.2 million dollar XXXX market"), units of sales, value of shipments or industry sales in addition to phrases such as "market share" and "share of the XXXX market.". HBR Learnings online leadership training helps you hone your skills with courses like Marketing Essentials. Building strategies are based on active efforts to increase market share by means of new product introductions, added marketing programs, and so on. (For an explanation of how businesses, markets, and ROI results are defined and measured in the PIMS project, see the sidebar.) Infrequently purchased products tend to be durable, higher unit-cost items such as capital goods, equipment, and consumer durables, which are often complex and difficult for buyers to evaluate. Formerly called eHRAF Collection of Ethnography. Generally, the businesses that were building (i.e., had share increases of at least 2 points) had ROI results of 1 to 2 points lower than those that maintained more or less steady (holding) positions. Trade sources have estimated that Schick spent $4.5 million in 1972 and $5.2 million in 1973 on advertising, whereas the companys advertising expenditures in 1970 and 1971 had been under $1 million annually. In Exhibit II we give measures of price relative to competition for each group of businesses that indicate otherwise. Specifically, as market share increases, a business is likely to have a higher profit margin, a declining purchases-to-sales ratio, a decline in marketing costs as a percentage of sales, higher quality, and higher priced products. Find the free tool, See Brands and Their Companies under "Products". Exhibit I shows average pretax ROI figures for groups of businesses in the PIMS project that have successively increasing shares of their markets. Comprehensive source of business, industry, and investment information. US Census Bureau provides monthly, quarterly, and annual measures of industrial activity. The data presented in Exhibit I imply that, in many cases, even a marginally acceptable rate of return can be earned only by attaining some minimum level of market share. Other things being equal, a greater extent of vertical integration ought to result in a rising level of manufacturing costs. Depending on how great the gains are and how long it takes to achieve them, this cost may or may not be offset by the longer-term gains. Data were compiled for individual businesses by means of special allocations of existing company data and, for some items, judgmental estimates supplied by operating managers of the companies. Presents key statistics from the Economic Census and per capita ratios using data from Population Estimates for a user-selected industry. Brands and Their Companies From the Gale Directory Library, find the companies behind the brand. - International Consumer Markets 2018-2019 Research help for international markets The Mintel database contains the following: Fitch Connect (fka BMI Research) contains global industry reports with a focus on forecasting. The data on which this article is based come from the unique pool of operating experience assembled in the PIMS project, now in its third year of operations at the Marketing Science Institute. Since high market-share businesses are on the average somewhat more vertically integrated than those with smaller shares, it is likely that investment turnover increases somewhat more with market share than the figures in Exhibit II suggest. For instance, companies enjoying strong competitive positions in their primary product markets tend to be highly profitable. You can find some ratios in the Compustat Excel Analytics section of a companys information page, as well as in the data from the S&P Industry Surveys. Exhibit VI How ROI Is Affected by Market-Share Changes. In addition to the subscription databases below, see the Census & Demographic Data guide, The New Americans: Recent Immigration and American Society Anther good resource for MKTG 455, American Marketplace: Demographics and Spending Patterns 2014. There is no ONE SINGLE source or market share information. Market share is the percentage of sales (by value or volume) that a brand or company has for a specific product or category. The authors also analyze the strategic implications of the market-share/ROI relationship. Beyond this, strategic choice requires a balancing of short-term and long-term costs and benefits. The acts of sending email to this website or viewing information from this website do not create an attorney-client relationship. Market leaders obtain higher prices than do businesses with smaller market shares. Much of this information is also available via. Data-Offers capabilities to compare & contrast multiple data series, perform statistical calculations on the data, and customize output views. Examples of businesses include manufacturers of TV sets; man-made fibers; and nondestructive industrial testing apparatus. It includes country risk and financial market reports on industries ranging from automotive to telecommunications. The Chase Law Group, LLC | 1447 York Road, Suite 505 | Lutherville, MD 21093 | (410) 928-7991, Easements and Related Real Property Agreements. Provides reports for the top 14 US business-to-consumer categories and tracks consumer attitudes and behaviors. The main thrust of Fruhans article was to encourage business strategists to consider certain questions before launching an aggressive market-share expansion strategy: (1) Does the company have the necessary financial resources? ", GMID- Global Market Information Database (Euromonitor), Industry Analysis - Manufacturing and Services, Economist Intelligence Unit Market Indicators and Forecasts, Faulkner Advisory for Information Technology Studies (FAITS). Market leaders, in contrast to their smaller competitors, spend significantly higher amounts on research and development, relative to sales. IndustryWeek 1000 is IW's exclusive annual ranking of the world's 1000 largest public manufacturers, based on revenue. Here's a helpful site from the Census Bureau- North American Industry Classification System: FAQ. This could be because, despite the increase in vertical integration, costs are offset by increased efficiency. In this article we shall attempt to provide partial answers to these questions by presenting evidence on the nature, importance, and implications of the links between market share and profit performance. 1. NAICS was developed under the auspices of the Office of Management and Budget (OMB), and adopted in 1997 to replace the Standard Industrial Classification (SIC) system. The data show too that capacity utilization is not systematically related to market share. For consumer goods, large-scale businesses may derive an important cost advantage from their ability to utilize the most efficient mass-advertising media. US Bureau of Labor Statistics (BLS) "snapshots" of national data obtained from different BLS surveys and programs. 3. Harvesting strategies are designed to achieve high short-term earnings and cash flow by permitting market share to decline. Nevertheless, Exhibit II shows that the major reason for the ROI/market-share relationship is the dramatic difference in pretax profit margins on sales. Industry Market Research And Industry Risk Ratings in 6 categories: US Industry Reports (NAICS), US Specialized Industry Reports, Global Industry Reports, US Risk Ratings Reports, US Risk iExpert Summaries, and US Business Environment Profiles, Great source for industry reports and brand information, as well as statistics. Industry reports include industry analysis, outlook, products and markets, market segments, supply chain, major players, competitive landscape, operating conditions, key statistics, and more. Obviously, then, the ROI differential is smaller when buyers are somewhat concentrated. In addition, leading brands of consumer products appear to benefit to some extent from a bandwagon effect that results from the brands greater visibility in retail stores or greater support from retail store sales personnel. Integrates more than 80,000 diverse topics of data and facts from over 22,500 international sources. American FactFinder has been replaced by data.census.gov. Vanilla flavored ready to drink iced coffee) to extremely broad industries (i.e. USER MUST CREATE AN EMAIL AND PASSWORD ACCOUNT TO USE THIS RESOURCE. Create graphs, reports and infographics. Exhibit I Relationship Between Market Share and Pretax ROI. Similarly, Motorola, with an estimated 6% to 7% share of U.S. TV-set sales, and a rumored loss of $20 million in the period from 1970 to 1973, announced its intention early in 1974 to sell the business to Matsushita. Part of the "Who's Buying" series. Statistics and studies gathered by market researchers, trade organizations, scientific publications, and government sources on over 600 industries. Since there is a bigger risk inherent in a wrong choice, the purchaser is often willing to pay a premium for assured quality. Despite the similarity of relative prices for the first four share groups, the purchases-to-sales ratios decline in a regular, substantial fashion as share increases. Reports on major economic, scientific, and technological developments in industrial, pharmaceutical, and high technology worldwide. This subscription includes reports for the US and China, as well as global industry reports. Statista reports now allow you to create your own interactive industry comparisons with Tableau Workbook. Does the notion vary from industry to industry? Indeed, it appears that one pattern operates as share increases up to 40%, but a somewhat different pattern above that figure. A good resource for MKTG 455- Multi-cultural database of books, articles & dissertations organized by cultures, ethnic groups & traditions. The authors, senior faculty at the Harvard Business School, concentrate on consumer marketing. But we are convinced that in most markets there is a minimum share that is required for viability. The MarchApril 1974 issue of HBR carried an article that reported on Phases I and II of a project sponsored by the Marketing Science Institute and the Harvard Business School. Accelerate your career with Harvard ManageMentor. Vertical integration thus has a strong negative relation to the ratio of purchases to sales. The earlier article established a link between strategic planning and profit performance; here, with additional data, the authors come up with a positive correlation between market share and ROI. On the surface then, higher investment turnover does not appear to be a major factor contributing to higher rates of return. Also, recognizing that emphasis on market share varies considerably among industries and types of market situations, decisions concerning product and customer are likely to be influenced. At the risk of oversimplification, we can classify market-share strategies into three rather broad groups: 1. However, when buyers are concentrated, the leaders average advantage in ROI is reduced to only 19 percentage points greater than that of the average small-share business. During 1973, 57 major North American corporations supplied financial and other information on 620 individual businesses for the three-year period 19701972. Reports on computer and communications technologies. 3. This does not, however, appear to be the case. The MarchApril 1974 issue of HBR carried an article that reported on Phases I and II of a project sponsored by the Marketing Science Institute and the Harvard Business School. In examining these figures, remember that the PIMS sample of businesses includes a wide variety of products and industries. Users may create accounts to save their work. It seems you have Javascript turned off in your browser. When the plant and equipment used in a business have been almost fully depreciated, for example, its ROI will be inflated. Clearly, the strategic implications of the market-share/profitability relationship vary according to the circumstances of the individual business. Monthly & Annual Retail and Food Service Sales and Inventories: - Business-to-Business Marketing 2018-2019, Consumer Use Of The Internet & Mobile Web 2018-2019, Restaurant, Food & Beverage Market Research Handbook 2018-2019. Companies may report their own market share in the text of their annual reports and filings, on their Web sites, in press releases and other documents. While our analyses of the PIMS data base clearly demonstrate a strong general relationship between ROI and market share, they also indicate that the importance of share varies considerably from one type of industry or market situation to another. Businesses with market shares under 10% had average pretax losses of 0.16%. When does harvesting make sense, assuming it is a matter of choice? The basic purpose of the project is to determine the profit impact of market strategies (PIMS). Data also indicate that the advantages of large market share are greatest for businesses selling products that are purchased infrequently by a fragmented customer group. Boston Consulting Group, Inc., Perspectives on Experience (Boston, 1968 and 1970). This website works best with modern browsers such as the latest versions of Chrome, Firefox, Safari, and Edge. While the PIMS data base is the most extensive and detailed source of information on the profit/ market-share relationship, there is additional confirming evidence of its existence. Reports are typically 35-40 pages in length. Try using the resources of an association's web site. For example, our data indicate that large-share businesses usually earn higher rates of return when they charge premium prices. As Exhibit V shows, when buyers are fragmented (i.e., no small group of consumers accounts for a significant proportion of total sales), the ROI differential is 27 percentage points for the average market leader. The data shown in Exhibit I demonstrate the differences in ROI between high- and low-market-share businesses. Please enable Javascript and reload the page. Certain parts of this website require Javascript to work. Exhibit II reveals that the ratio of investment to sales declines only slightly, and irregularly, with increased market share. Holding strategies are aimed at maintaining the existing level of market share. The ABI/INFORM Complete database features full-text journals, dissertations, working papers, key business and economics periodicals such as the Economist, country-and industry-focused reports, and downloadable data. GMID includes statistics on consumer lifestyles, retailing, consumer market sizes and forecasts; market research such as analysis reports, market profiles, and the retailing industry; and companies profiles with financial and brand information. 1. Return on investment was measured by relating pre-tax operating profits to the sum of equity and long-term debt. Markets were defined, for purposes of the PIMS study, in much narrower terms than the industries for which sales and other figures are published by the Bureau of the Census. Presents comparative business statistics. They conclude by advising companies to analyze their own positions in order to achieve the best balance of costs and benefits of the different strategies. Market share is usually determined by consulting various sources. This guide provides an overview of how to conduct detailed industry researchers, primarily utilizing information in the University Library System's resources. Of course there are exceptions to this rule. Opposed to a share-building strategy is one of harvestingdeliberately permitting share to fall so that higher short-run earnings and cash flow may be secured. How should each be implemented? Consequently, when we compare businesses with market shares under 10%, say, with those having shares over 40%, we are not observing differences in costs and profits within a single industry. The report that is created can be exported into a Microsoft Excel format. S&P NetAdvantage has some company and industry ratios in two different sections of the database. food and beverage). Marketing data and reports on industries, companies, markets, and consumers from over 200 countries. We asked the PIMS participants to indicate on a five-point scale whether their prices were about the same as major competitors, somewhat higher or lower, or substantially higher or lower for each business. A key question for businesses that are pursuing holding strategies is, What is the most profitable way to maintain market position? The answer to this question depends on many things, including the possibilities and costs of significant technological change and the strength and alertness of competitors. It also includes Industry 1000 lists back to 1999. Also, ROI is usually greater for large-share businesses when they spend more than their major competitors, in relation to sales, on sales force effort, advertising and promotion, and research and development. The net balance will depend on managements assessment of the direction and timing of future developments such as technological changes, as well as on its preference for immediate rather than deferred profits. This website works best with modern browsers such as the latest versions of Chrome, Firefox, Safari, and Edge. It looks like you're using Internet Explorer 11 or older. The basic purpose of the project is to determine the profit impact of market strategies (PIMS). A principal reason for this may be that market leaders also tend to produce and sell significantly higher-quality products and services than those of their lower-share competitors. Negative responses to these questions would obviously indicate that a company should forgo market-share expansion until the right conditions are created. You should consult with an attorney licensed to practice in your jurisdiction before relying upon any of the information presented here. Key Business Ratios on the Web (KBR) provides online access to competitive benchmarking data. What market-share goals are feasible, or even desirable, obviously depends on many things, including the strength of competitors, the resources available to support a strategy, and the willingness of management to forgo present earnings for future results. These and other differences among businesses should naturally be kept in mind in evaluating the reasons for variations in ROI performance. Use advanced search for companies with the same SIC or NAICS code and create a comparison report. Collects Industry Market Research and Industry Risk Ratings in 6 categories: US Industry Reports (NAICS), US Specialized Industry Reports, Global Industry Reports, US Risk Ratings Reports, US Risk iExpert Summaries and US Business Environment Profiles. ** NOTE: The license limits access to CURRENT MASON STUDENTS, FACULTY & STAFF ONLY (both in Library and off campus). Particularly, there are substantial differences in relative price and product quality between market leaders and the rest of the sample. And, what does the profitability/market-share relationship imply for strategic planning? See the Industry Snapshots for an industry overview and information on leading companies. The short-term cost of building was greatest for small-share businesses, but even for market leaders, ROI was significantly lower when share was rising than it was when share was stable. Geographic regions covered: Africa, Asia, Caribbean, Europe, Latin America, Middle East, and North America; reports are further divided by country. Harvesting is more often a matter of necessity than of strategic choice. View a tutorial on this database. Each report covers market sizing and segmentation as well as consumer attitudes and trends. Obviously, no individual business can have a negative profit-to-sales ratio and still earn a positive ROI. from Films on Demand is worth watching! As explained in the earlier HBR article, the focus of the PIMS project has been primarily on ROI because this is the performance measure most often used in strategic planning. We measured quality as follows: We asked the participating companies to judge for each business the proportions of total sales comprised of products and services that were superior, equivalent, and inferior to those of leading competitors. Provides reports for the top 14 US business-to-consumer categories and tracks consumer attitudes and behaviors.
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