1.1.1 Measuring Markets

Question 1

What is market size

Answer 1

The volume of sales of a product or service or the value of sales of a product or service

Question 2

What is the size of the following market in which only 3 firms operate:-
Riva £20 million
Stovax £17 million
Barbus £27 million

Answer 2

20+17+27= £64 million

Question 3

What is market growth

Answer 3

The percentage change in sales over a period of time

Question 4

What are factors that effect market growth

Answer 4

a. the state of the economy – a growing economy will lead to growth in most markets
b. change in tastes or fashion – television and DIY for instance
c. social changes – longer working hours has led to high demand for ready meals etc

Question 5

What is the formula for market growth

Answer 5

Change in the market size ÷ Original Size of the Market x100 (%)

Question 6

Example: the market for milk increased from £210million to £295million from 2019 to 2020. What is the percentage increase in the market size?

Answer 6

295 - 210= 85
85,210 x 100= 40.48%

Question 7

What is market share

Answer 7

The percentage or proportion of the total sales of a product ore service achieved by a firm or specific brand name

Question 8

What is the formula for market share

Answer 8

Sales of one product/brand/company ÷ Total sales in the market x100 (%)

Question 9

Example: EE has sales of £1.2billion in a mobile phone market worth £3billion. What is its market share?

Answer 9

1.2 billion ÷ 3 billion x 100= 40%