The document defines and provides methods for calculating market size, market share, and market growth. It states that market size is the total potential revenue from all buyers in a market. Market share is a firm's revenue as a percentage of total market revenue. Market growth is the percentage change in market size from one period to another. It then provides steps and examples for calculating each of these key market metrics.

1. MARKET
SIZE
MARKET SHARE
MARKET GROWTH
Market size is made
up of the total number
of potential buyers of
a products or
services within a
given market and
subsequently, the
total revenue that this
sales may generate.
Is the percentage of
sales in a market
that is made by one
firm, product or
brand
Is the rate at
which a market
size is
increasing

2. Market Size Steps
1. Identifying total potential market
2. Identify target market
3. Determine penetration potential
4. Multiply target market by penetration
potential
HOW TO CALCULATE MARKET SIZE

3. Market Value (Potential
Revenue Example)
Each store sells
20,000/yr
400 stores x 20,000 = 8M
Market Size Example
Total potential market =
50,000 stores
Target market = 1,000
stores
Penetration potential = 40%
success rate
1,000 stores x 40 %
success rate = 400 stores
Number of Target Market (customers) X Purchases in
given period of time = Market Volume/Size
Market Size = Sales/Market share X 100

4. We know that Company A's total
sales revenue in 2021 was P550,000, and
its market share is 7 per cent.
Marketsize=P550,0000.07=P7,857,143
The market size is P7,857,143.

5. MARKET SHARE
Firm’s Revenue
X 100
Market Revenue
Example:
In a given year TJ dealership
had sales revenue of
P310,000. In that same year
P2,000,000 worth of revenue
was made in the automotive
industry. Calculate the market
share for TJ dealership.
310,000/2,000,000x100
= 15.5%
HOW TO CALCULATE MARKET SHARE

6. MARKET GROWTH
New Market Size – Old Market Size
X 100
Old Market Size
Ex:
Market growth in 2021 P2,000,000
Market growth in 2022 P2,600,000
2,600,000 – 2,000,000
X 100
2,000,000
= 30%
HOW TO CALCULATE MARKET GROWTH

7. Market growth measures how much a market has changed. It represents
the rate at which the market is increasing (or decreasing in some cases).
It measures the percentage of change in the market between two
years. Market growth is not the same as sales growth. Sales growth is the
change in the number of sales between two years.
Just because sales during a certain period have increased does not mean
that market share has also increased. In a growing market, sales often
increase due to the general growth of the market, especially when
compared to other, more stagnant markets. Increased sales do not
automatically mean increased market share.
Change in total sales
X 100
Total sales in first year
Sales Growth

8. The size of the market in 2019 was £1.7
million. The size of the market in 2020 is
£2 million. What is the market growth rate
of this market?
17.65%
In 2019, Company X's total sales were
£700,000. In 2020 Company X's total sales
amount to £750,000. What is the total
sales growth of Company X?
7.14%

9. Calculating Market Size (per period)
1. Number of units sold in market (per period) Units 100,000
Average selling price (P) in market SP 15.00
Market size = MSize
2. Firm's revenues (per period) Revs P250,000
Market Share (%) MShare 5.0%
Market size = MSize
3. Number of units sold (qty) in period Units 5,000
Average selling price (P) SP 20
Firm's Sales Revenue = Revs
4. Market size (P) MSize P2,000,000
Firm's Market share (%) MShare 5.0%
Firm's Sales Revenue = Revs

10. Market Share
5. Your company sells notebooks and planners and your total revenue for a
fiscal quarter is P200,000. During that same fiscal period, total industry
sales were P2,000,000.
=
6. Grayson Auto is a domestic company that manufactures non-luxury
vehicles. The company earned P60 billion in revenue in 2022. The auto
industry as a whole had P900 billion in revenue.
Market share =
7. In 2022, Grayson Auto sold 4 million vehicles. The worldwide auto
industry as a whole sold 60 million vehicles.
Market share =

11. 8. Market Size (P) This Year (Y1) Y1 P4,600,000
Market Size (P) Last Year (Y0) Y0 P4,200,000
Change in Market Size (P) (Y1 - Y0)
Market Growth

12. How to increase your market share
Here are a few strategies you can use to increase your company’s market share:
Lower prices: Pricing your product below the market could provide a competitive
advantage, allowing you to increase sales by providing a more appealing deal
than similar options. Lower prices often attract new customers, which is a driving
factor for generating revenue.
Innovate new products and features: Creating a new product or new features
for the product you sell can attract new customers. New customers make new
purchases and contribute to higher profit margins and larger contributions to
overall industry revenue.
Build customer loyalty: Customer loyalty measures a customer’s satisfaction
with a brand. Loyal customers are often likely to make repeat purchases or pay
more for products or services because they’ve had positive experiences with a
business in the past.
Increase brand awareness: Branding awareness and marketing play a large role
in capturing market share. It's important to get your name out there so customers
know who you are. Becoming a household name and the preferred brand in an
industry will help increase your market share.
Grow organic search market share through search engine optimization
(SEO): In terms of marketing return on investment (ROI), organic search can be
one of the most effective ways to acquire customers.

13. Calculating Market Size (per period)
1. Number of units sold in market (per period) Units 100,000
Average selling price (P) in market SP P15.00
Market size = (Unit x SP) MSize P1,500,000
Firm's revenues (per period) Revs P250,000
Market Share (%) MShare 5.0%
Market size = (Revs / Market Share) MSize P5,000,000
Number of units sold (qty) in period Units 5,000
Average selling price (P) SP P20
Firm's Sales Revenue = Revs £100,000
Market size (P) MSize P2,000,000
Firm's Market share (%) MShare 5.0%
Firm's Sales Revenue = MSize x MShare Revs P100,000
Market Size (P) This Year (Y1) Y1 P4,600,000
Market Size (P) Last Year (Y0) Y0 P4,200,000
Change in Market Size (P) (Y1 - Y0) P400,000

14. Market Share
5. Your company sells notebooks and planners and your total revenue for a
fiscal quarter is P200,000. During that same fiscal period, total industry
sales were P2,000,000.
= 10%
6. Grayson Auto is a domestic company that manufactures non-luxury
vehicles. The company earned P60 billion in revenue in 2022. The auto
industry as a whole had P900 billion in revenue.
Market share = (P60 billion / P900 billion) x 100 = 6.7%
7. In 2022, Grayson Auto sold 4 million vehicles. The worldwide auto
industry as a whole sold 60 million vehicles.
Market share = (4 million / 60 million) x 100 = 6.7%

15. Venn Diagram
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