Brands may be heading for danger by orientating their strategy towards growing market share, marketing leaders warn.

In this year’s Language of Effectiveness survey, in partnership with Kantar and Google, growing market share once again emerged as the top priority for marketing. Almost three in five (57.9%) of the over 1,000 brand marketers surveyed say growing market share is one of the most important priorities.

Indeed, prioritising market share growth is a consistent theme across subsequent editions of Language of Effectiveness. In both 2023 and 2024, growing market share emerged as the top priority for marketing in businesses.

Market share can indicate competitiveness versus rivals and will often translate to commercial success, particularly for smaller challenger brands seeking to disrupt a category and win sales from bigger rivals. Yet, winning on market share doesn’t always translate to sustained growth.

Being obsessed with market share is actually dangerous.

Yves Briantais, Carlsberg

In fact, while growing market share is about getting a bigger share of the pie, it does not necessarily take into account how large “the pie” (or the category) is. A metric that does look to grow the pie is category growth.

Yet, the Language of Effectiveness data suggests category growth is a priority for few marketing teams. Less than one in five (19.7%) respondents say growing their brand’s category was one of the most important jobs for the marketing team.

Of the eight jobs marketing respondents were asked about, category growth only emerges above growing profit in terms of priorities for the function.

A focus on growing market share above category is counter to how a business like Mars conceives its success, says food and nutrition CMO Matt Graham.

“The number one indicator of our performance is our contribution to category growth,” he tells Marketing Week.

For Mars, owner of market-leading food brands including Dolmio and Ben’s Original, the imperative is to grow the pie as well as going after a bigger share.

A ‘dangerous’ fixation

Carlsberg global CMO Yves Briantais is another marketer agrees that, for big brands in particular, growing categories is an imperative. If a brand leads a category then it must grow that market to drive real growth, he states.

“I truly believe we need to be obsessed with the category growth, with penetration of the category,” he says.

“Being obsessed with market share is actually dangerous.”

It’s dangerous because for a large, mature brand, chasing after share will only get you so far. It also can lead to short-termism and reactionary tactics, Briantais contends.

Furthermore, if brands focus primarily on market share it can lead to direct competition with competitors and a tit-for-tat scenario, where one brand steals market share just for the other to steal it back. Most of the time, the way this is done is through pricing.

Driving the fundamental execution elements is what is going to build categories and it will ultimately drive share as well.

Matt Graham, Mars

Graham agrees that competition on market share often leads to short-termism. He notes sometimes brands come under-pressure to drive short-term results, such as growing market share versus competitors.

Indeed, in the Language of Effectiveness data, market share emerges as something over two-thirds of marketers say their business is more focused on as a result of the current economic climate.

When marketers come under pressure to deliver results for the short-term what usually happens is they end up leaning on the price lever.

“Typically, that involves dropping price, which means you might get very short-term share ups and downs. But it doesn’t mean much, because our competitors can do that. Then you get things like private label coming in. So, it’s a vicious cycle,” he says.

Reliance on discounting to drive sales or market share can act to damage a brand’s equity in the long-term or draw it into a price war with rivals, resulting in a “race to the bottom” situation where nobody wins.

Category growth ‘challenges’ brands to grow

For FMCG businesses like Carlsberg and Mars, which largely work with partners to distribute their products, focusing on category growth is more productive both for their own businesses and the retailers they work with.

“When you talk to [retailers] about market share, you are not helping their sales, you’re driving your sales at the expense of somebody else’s,” says Briantais.

He explains that when brands talk about their goals in terms of category growth it helps them have “better” conversations with their distributors.

As well as forging more productive relationships with retailers, choosing to prioritise category growth rather than market share can also drive more creative thinking from teams, he suggests.

Market share growth trumps driving sales as marketing’s ‘most important’ job

“When you start challenging your team on ‘How can you grow the category? How do you bring people to the category?’ then you come up with far better innovation ideas and communications ideas, because you need to disrupt,” he says.

Graham is also a “firm believer” in the need for brands to grow categories. While a focus on driving market share can translate to short-termism, he believes the way for marketers to grow categories involves everything through from driving product performance and ensuring the value proposition is right to delivering great creative.

While growing categories might involve a longer-term mindset versus taking share, one is not mutually exclusive to the other, says Graham.

“Driving the fundamental execution elements is what is going to build categories and it will ultimately drive share as well,” he says.

“Because if we’re growing ahead of the category, here’s what happens, we’re growing share as well.”

Driving category growth

While for smaller brands in established categories, taking share from competitors can be a way to grow, for big brands in categories with relatively smaller footprints, category growth is absolutely essential.

Drinks business Diageo is currently growing its tequila portfolio, led by global brands Don Julio and Casamigos, the goal being to mainstream the spirit globally.

“At the end of the day, we are under-penetrated versus whiskey and vodka,” says Sophie Kelly, senior vice-president of tequila at Diageo. “So our main agenda is to recruit more consumers into the category.”

Her major metric of success is both “educating” consumers about the category – and driving perceptions of tequila beyond shots – and recruiting new drinkers. As Diageo seeks to expand the footprint of tequila, category growth must take precedence.

Taking tequila beyond shots: Diageo on growing its portfolio worldwide

By contrast, beer is an extremely popular category with consumers, it’s the most highly penetrated alcohol category in both the UK and US. Globally, one in three consumers in the world will buy beer at least once a year, according to Innova Market Insights.

As a very mature category with high penetration, beer faces its challenges, with a high number competitors and less younger adults buying into the category.

“The beer category is challenging, but I don’t think we are doomed. It’s up to us to reimagine the beer category,” says Briantais.

The Carlsberg CMO believes beer businesses should be responsible for reimagining the category, rather than fighting it out over share.