Understanding Markets
AS Business Studies
Aims and Objectives
Aim:
• Understand market share, size and growth
Objectives:
• Define market share, size and growth
• Calculate market share and growth
• Analyse changing market share and growth
• Evaluate changing market shares
Starter
• Define segmentation.
• Give a benefit of market segmentation.
• Define market mapping.
• What does market mapping allow an
entrepreneur to identify?
Success of Marketing Depends
On..
• Demand is determined by the following:
– Competition – the actions of competitors
– Price – some products demand will change with price
changes
– Incomes – some products demand will change with
income changes
– Marketing – relationship between amount of money
spent on marketing and sales
– External factors – state of economy
Market Share
The proportion of a
total market
accounted for by one
product or company.
Market Share Sports Industry
Other
7% Mizuno
7%
Asics
8%
Nike
24%
Puma
9%
Umbro
10%
Fila
12%
Reebok/Adi
das
23%
Market Share High End Fashion
31% Other
6% Marc
Jacobs
7%
Aquascutum
18%
Burberry
21% Gucci
Group
17% Louis
Vuitton
Calculate Market Share
Total Sales Of Firm
---------------------------- X 100
Total Sales of Industry
Calculate Market Share
Company
Sales £
Hendersons
125,000
Williamson
250,000
Bryant
200,000
Toppings
50,000
Total
625,000
Market Share
100%
Market Growth
The measurement of the
change in market size,
usually expressed as a
percentage of its original
size.
Market Growth
How much value of
market has changed
-----------------------------The original value of
the market
X 100
Market Growth
• Original value of market
£425,000
• New value of market £570,000
• Calculate market growth
Market Growth of Business
• Original sales £20,000
• New sales £27,000
• Calculate market growth for the
firm
Market Size
The measurement of the
size of total sales for a
whole market expressed in
terms of value of sales or
volume of sales (units).
Market Size, Growth and Share
• Worksheet
Sales in
2007
Market
Share in
2007
Sales in
2008
Hendersons
90,000
125,000
Williamson
210,000
250,000
Bryant
190,000
200,000
Toppings
60,000
50,000
Total
550,000
100%
625,000
Market
Share in
2008
100%
% Change
in Sales
between
2007 and
2008
Statement
Henderson’s sales have fallen.
Henderson’s sales have risen.
Henderson’s market share has fallen.
Henderson’s market share has risen.
The market as a whole has grown at a greater rate than
Henderson’s sales.
The market as a whole has grown at a slower rate than
Henderson’s sales.
Henderson’s market share has grown by 4 percentage points.
Henderson’s market share has grown by 39%.
Henderson’s and Williamson’s sales have grown at a faster rate
than the market as a whole.
Hendersons’ has the biggest market share in 2008.
Bryant’s sales have grown by 5%.
Bryant’s market share had risen by 3%
True or False?
EV: Market Share Issues &
Opportunities
• What problems may a business face if it is losing
market share?
• What opportunities may there be of a business
which has an increasing market share?