Is Market Share all that It's Cracked up to Be?

Abstract

The market share-ROI relationship is examined to determine the extent of the causal versus spurious association. By making use of the PIMS data base, it is found that a large proportion of the association is spurious in the sense that both market share and ROI are the joint outcome of some third factor(s). The direct impact of market share on ROI is found to be much smaller than previous studies have indicated. It is suggested that too much emphasis is placed on market share and that more attention needs to be focused on other fundamentals.