Leadership Is Becoming Increasingly Difficult

Tat, the leader in canned foodstuffs, has lost 12 percentage points of market share in four years. Others who have lost market share include Turkcell, the clear leader among GSM operators, and Nokia, the leader in the mobile phone sector, which lost 11.6 percent.... But, even if their number is small, there are also those which have been fortunate. Unilever’s Knorr has recorded a success story after increasing its market share by 11 percent over the last four years. Here are the interesting changes that have occurred in “top-sellers’ league” and what these changes mean.

Rising costs, falling prices, profit margins close to zero and tight competition have all come together. For these reasons, becoming the leader and staying the leader is becoming increasingly difficult. Of course, the global crisis which began in the final quarter of 2008 has not made things any easier at all. This is what is having a negative impact on the “top sellers’ league”. We conducted a study to examine the changes in the “top sellers’ league”. We evaluated the leaders’ market shares in 20 categories in 2004 and 2008. According to our study, in 17 of the 20 categories the “leader” had not changed. But in 13 of these 17 categories the leaders had lost market share. In other words, in only four categories had the market leaders succeeded in increasing their market share. This finding is an indication that it is becoming increasingly difficult to remain the leader. We found a new leader in only three of the sectors and categories which were the subject of our study. This is also an indication of how difficult it is to become the leader.

The Leaders’ Shares Have Been Eroded
The company in the “top sellers’ league” which had suffered the most was Tat, the leader in the canned foods category. A comparison of the nine month market shares for 2004 and 2008 shows that it lost 12 percentage points. Another category in which there had been a significant loss was mobile telephones. According to data from the Mobile Communications Devices and Information Technologies Businesspersons Association (MOBİSAD), in the last four years the market share of the leader Nokia had declined from 63.1 percent to 51.5 percent. In the last four years, Turkcell, the leading network operator, had seen its market share fall by 11 percent. In banking, based on the nine month data for 2004 and 2008, Ziraat has preserved its leading position. But the gap between Ziraat and its closest pursuer, İş Bankası, declined from 6 percent to 0.5 percent in the first nine months of 2008.

There Are Also Fortunate Leaders
There were also those in the top sellers’ league which had succeeded in increasing their market shares. In four of the 17 categories in which the leader had not changed the leaders had succeeded in increasing their market share. Two of the brands which had succeeded in increasing their market share belong to Unilever Türkiye. The brand which increased its market share the most over the four years was Unilever’s Knorr. In the ready-soup category Knorr accounted for 59 percent of the market, up from 48 percent in 2004.

According to data from IDC, HP, the leader in the computer market, had a market share of 12.8 percent in 2004. Last year the company increased this to 14.9 percent. In consumer durables, Arçelik increased its market share from 53 percent to 54 percent over the last four years.

New Leaders
There are sectors in which the leadership has changed. In the financial sector, they are insurance and leasing. According to data from the Association of Insurance and Reinsurance Companies of Turkey (TSRSB), Anadolu Sigorta was the leader in 2004 with 8.65 percent. By the end of 2008, Axa Oyak had taken over the leadership with a market share of 10.48 percent. In 2004, Koç Leasing was the leader in leasing with a share of 13.2 percent, but last year the leadership passed to Garanti Leasing which took 15.2 percent. In 2004, Tekel’s cigarette division was the market leader with 47 percent. By 2005 it had lost its position to Philip Morris. According to data from the Tobacco and Alcoholic Market Regulation Board (TAPDK), at the end of 2008, Philip Morris had a market share of 41.3 percent. BAT, which bought Tekel in 2008, had reached a market share of 34 percent at the end of 2008.

The Number Of Players Is Rising
Ali Levent Orhun, who is one of the managing partners at GfK Türkiye, says that the increase in the number of players in many sectors has brought changes. Orhun says that the most striking example is the automotive sector. Indeed, that fact that, in both the passenger cars and the light commercial automobile segments, companies have very similar market shares shows how fierce the competition is. Orhun says: “At the moment there are 45 brands in the passenger category alone. Two years ago the number of brands was around 35. In each of these automotives categories where the number of brands is increasing, and which contracted by close to 17 percent in 2008, the leaders stayed the same. But the two leaders are losing market share.

The Situation In The Sub-Categories
There are also losses in the relatively small categories. In foodstuffs, Tat has retained control of the market through the tomato products it produces in the canned and ketchup categories. But, in the last four years, it lost 12 percent in canned products and 4 percent in tomato puree. Increasing market share is becoming much more important in fast-moving consumption products, because in these categories there is a higher risk that the impact of the crisis will change the standings. A study by Nielsen shows which categories are in danger. It found that the categories in which brand preferences could change were diapers, liquid soap, detergent, bleach, cleaning goods for floors, deodorants and hand and body creams.

Elçin Cirik
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