Market Share Analysis Turns 30 Years Old

Some colleagues have called the Market-Share Analysis: Evaluating Competitive Marketing Effectivenessthe “Bible of Middlegame.” I haven’t really tried to dispute the claim. The text by Lee Cooper and Masao Nakanishi is truly a ground breaker for me and admittedly the foundation of the Competitive Interaction Analysis (CIA)® platform. We have talk about the book repeatedly on this blog. Lee Cooper is one of the Middlegame Heroes

The foundational roots of the book were planted in the early seventies when the authors started analysing political election results while working with Harold Kassarjian. According to the book’s forward, neither Lee nor Masao were content with the methods and models used in that line of work. They set out to properly define the different methods needed to reflect the special nature of shares—whether that be vote shares, customer shares, or the values of market-shares for consumer products. The timing of publication in late 1988 couldn’t have been better for me. I had just left the Farmer School of Business at Miami University (OH) in 1989 to pursue a career in marketing and decision sciences. InfoScan, the first national scanner-based tracking system of UPC sales by IRi had been in place since 1987.

The opening in Chapter One provides the scope and objectives of the book while applying these through a series of hypothetical yet realistic conversations between members of a marketing team. Chapters Two and Three provide a more theoretical foundation. Chapter Two establishes some of the earliest choice models and then introduces the reader to the Multiplicative Competitive Interaction (MCI). The brilliance is in its eloquent simplicity. As I have stated often, the Middlegame Competitive Interaction Analysis (CIA)® is simply “MCI minus the M and plus the A.” Chapter Three is a perfect introduction to the competitive nature of markets and how choice models offer an enormous advantage for explaining competition through both differential and cross effects. 

Chapters Four and Five take it to the next level. In Chapter Four, Cooper and Nakanishi explain the nature of the data such as InfoScan becoming available to analysts. The issues of using UPC data is probably not completely relevant today. However, this is beyond a typical academic discussion in which the data is just assumed. Chapter Five is the real goldmine. After an extensive presentation of the formulas for market-share analysis like MCI and a real dataset, you find the exact SAS output you should expect to see if you applied the models to the data. I remember hurriedly typing data into a spreadsheet so I could upload it to the mainframe and test my SAS code. It took several iterations until the output on “green bar paper”matched perfectly. The next two chapters offer a lot of additional thinking that launches into the other elements of CIA® including the Market Structure and Market Size models. The closing Chapter Eight offers a glimpse into some of the challenges that Middlegame has wrestled with as our implementation of MCI has evolved over the decades. I guess it is true. Market-Share Analysis: Evaluating Competitive MarketingEffectiveness is the “Bible of Middlegame.”

Middlegame is the only ROMI consultancy of its kind that offers a holistic view of the implications of resource allocation and investment in the marketplace. Our approach to scenario-planning differs from other marketing analytics providers by addressing the anticipated outcome for every SKU (your portfolio and your competitors’) in every channel. Similar to the pieces in chess, each stakeholder can now evaluate the trade-offs of potential choices and collectively apply them to create win-win results.

Contact us at info@middlegame.com