Strategies and Pricing Policies for New Products and Product Bundles精选.pdfVIP

III Understanding Market Shares This page intentionally left blank 4 Should the Firm Pursue Market Share? In chapter 3 we discussed the problem of defi ning the market. In addition, we briefl y noted how the particular defi nition of a market aff ects the mea- sure of market share. In this chapter, we analyze the conditions under which the fi rm should pursue market share as a goal. For simplicity, we focus on the single-product fi rm. Chapter 5 will focus on the multiproduct fi rm. In our analysis we shall focus on the determinants of market share and analyze how these factors aff ect the fi rm’s marketing policy. In particular, we show that it is critical to distinguish between volume-based and revenue- based market share. As in previous chapters, we shall emphasize how to coor- dinate marketing and fi nancial decision making (i.e., Fusion for Profi t). h e information covered in this chapter will be useful when you are faced with the following decisions: • How should my fi rm measure the market share of its product? • Is it better to measure market share in terms of revenue or volume? • Under what conditions does it make sense to pursue market share as an objective? • Is there a confl ict between pursuing market share and maximizing long-run performance? • How do cost and demand dynamics aff ect market share? • Under what conditions should my fi rm attempt to be a pioneer in its industry? 47 48 U N D E R S T A N D I N G M A R K E T S H A R E S • Are there any conditions under which a low market share will lead to an increase in long-run profi ts? h e following terms will be introduced in this chapter (see glossary for defi nitions): asymmetric gross revenue process innovations— information in