Relative market share refers to what?

• A. The firm's revenue across all markets.
• B. The firm's market share relative to the market leader.
• C. The number of product lines.
• D. The marketing budget.

Answer: (B)

Relative market share measures how strong a firm is in its market by comparing its sales to the sales of the market leader. It answers the question: how big is your share in relation to the leader’s share? This is typically expressed as a ratio of your market share to the leader’s market share, or your sales divided by the leader’s sales. It helps signal competitive position, potential for economies of scale, and bargaining power within the market.

This is not about total revenue across all markets, nor about the number of product lines, nor about the marketing budget. It specifically looks at your position relative to the top competitor.