Many firms use market share to set marketing goals and monitor performance. This Journal of Marketing study examines the link between market share and profits in depth by exposing when and why the link occurs. In a large multi-industry sample, the authors test the three primary mechanisms theorized to link market share with firm profits: market power (the ability to raise prices), quality signaling (reducing customer quality uncertainty), and the learning effect (experience improving operating efficiency). Results show when and why managers may be more or less advised to use market share to set goals and monitor marketing performance.
Featured Speakers: Abhi Bhattacharya (University of Alabama) and Lopo L. Rego (Indiana University)
Full Journal of Marketing article: https://doi.org/10.1177/00222429211031922
Read the Scholarly Insight for this study here.