How is market share defined?

Market share is defined as the percentage of the total market controlled by a particular company or product. This measurement provides insight into a company's relative size within its industry and allows for comparisons against competitors. By calculating market share, businesses can evaluate their performance and the effectiveness of their marketing strategies.

Understanding market share is essential for assessing a company's positioning within a market landscape. A higher market share often indicates a competitive advantage, as it signifies greater consumer preference and loyalty, more significant brand recognition, and potentially more pricing power. It can also help identify trends, such as whether a company is gaining or losing ground to its competitors over time.

The other options describe different business metrics: total sales refer to the volume of sales within a specific timeframe, which does not account for the broader market context. The growth rate of a specific industry assesses expansion or contraction but doesn’t measure a company's relative standing. Total revenue relates to the financial inflow of a business without considering its share of the market. Hence, the definition of market share focuses specifically on the proportion of the market controlled by a company or product.