Estimating Market Share of Climbing Products
Part 1 of 2
Counting linear display space is a technique used in estimating the market share of hi-tech products. The idea behind it is to take a geographic area (the sample area) that is representational of the population as a whole, determine the percentage(s) of target product brand(s) to total products available, and then use various multipliers to adjust it to the population. Marketers are able to use this method of estimation to determine what the population proportion is currently in the retail space and forecast future sales.
I believe that this method can also be applied to the climbing/outdoor retailing world, specifically climbing cams. There are several reasons why this method of estimating market share works. First, cams, like hi-tech electronic, are a higher ticket items. They range anywhere from the $50’s to the mid $100 plus range and it is not uncommon for a climber to spend in excess of $1000 to assemble his/her rack. Therefore climbing retailers are encouraged to invest/carry inventory that is in their opinion most likely to sell. Prudent retailers will not tie-up large amounts of cash in expensive cams that will not sell well and have a quick turnover. The selection of cams on the wall represents just that, their determination of what the market will bare.
To estimate the climbing cam market share (population proportion), we first need to determine our sample area. The Utah Valley region makes for a good representational location for sampling due to a couple of factors, the population of climbers in the area, the quantity (Utah ranks 3rd in recorded routes on RockClimbing.com) and relative proximity to quality climbing, and the outdoor sports related focus of the region and state.
Next, we need to perform a field survey and visit all the available retail locations and count how many brands and related product lines that they have on display. In the nearby Utah valley area, I was able to identify 5 outdoor retailers of which 4 carried climbing cam.
We can use the result of our field survey to calculate the market share of our sample.
Based on the samples that we took, Metolius has the largest market share of cams followed by Black Diamond. It appears that the two brands with the strongest market share also have multiple product lines, providing them with a billboard effect on the walls and shelves increasing their visibility and brand recognition. And why not, if a certain brand of product sells well then the retailer will maximize their return and carry as many product lines from that brand.
In the next post I will discuss the significance of our sample proportions and what it might mean for the population as a whole.