Relationship Between Products Unit Sold and Price Changes with Market Share: The Case of Skin Care Products

In industries such as Fast-Moving Consumers Good (FMCG), where the products are usually transferred in high volume with low value, comparing value market share is important. The paper will further research on the relationship of the total unit sold and the changes in price with the market share of a specific company in the industry in hope that this research may help company to decide on product strategy based on whether the existing products’ contribution to the market shares is necessary or should the product need to be discontinued and replaced. The report will measure the relationship between the total products sold and the changes in price with the market share, which is derived from the proportion of values compared to the total market value of the skin care market. A Multiple Regression analysis was used to formulate the relationship using Ordinary Least Square (OLS) estimation method. It can be concluded that, number of unit sold of each product does have relationship to the market share regression model regardless its contribution’s significance. While prices changes do not significantly impacting the changes in the market shares, this can be caused by the loyalty of the customer towards the brand. In other word, these loyal customers will buy the product no matter how much the price has changed.