Market size and share

Definition of market size

the total number of potential buyers of a product or service within a given market and the total revenue that these sales may generate, it is a crucial factor in marketing strategically influencing how business allocate resources, target consumers and position their offerings

Large market size

known as a mass market, consisting of an undifferentiated market of consumers with widely varied backgrounds

Small market size

are known as a niche market, appealing to a very small and limited amount of consumers

Why take market size into account

• o understanding the size of your market

• Calculate potential earnings and growth

• Estimate number of employees (coping with supply and demand)

• Helps define target markets and segments to address elements of the marketing mix

How do you effectively apply market size

• Measured by volume purchased - number

• Revenue from sales

Benefits to market size

• Globalisation:

  • Multinational organisations entering all markets

  • Expanding market size as it becomes easier to operate across borders

  • Local to national businesses finding it harder to compete within markets, loosing dominance to foreign businesses

    • Income generated leave the country (market)

  • technology: creating new markets, declining others

Definition of market share

refers to the portion or the percentage of a market captured by one particular business or brand

Market share consists of

• services sold by quantity

• The value of sales - measured by the amount spent by consumers on the volume of goods sold and will be expressed in a currency value

• The number of customers:

  • Expressed as either a number, value or percentage

How is market share calculated

• Sales volume

• Sales value

• Number of customers

Why is market share calculated

• dicates business competitiveness

• Investors - help profitability

• Reputation

• Bargaining power

How can businesses increase market share

• ovation

• Customer loyalty

• Acquisitions: buying out a competitor