Markets — common mistakes

In exam questions, when presented with market size and growth data, don't just state the numbers. Calculate percentage changes, identify trends, and use this evidence to justify your strategic recommendations. For example, link high market growth to a decision to invest or low market share to a need for a new marketing strategy. This demonstrates application and analysis skills.

No, this is a common misconception. Market size refers to the total sales of all businesses in the entire market, not just one firm's customer base. Furthermore, it can be measured by the total value of sales (e.g., £1 billion) or the total volume of units sold (e.g., 50 million units), not just the number of individual customers.

Not necessarily. While a high-growth market presents significant opportunities, it also tends to attract many new competitors. This can lead to intense rivalry, price competition, and increased marketing costs. A business must still have an effective strategy to compete and capture a share of that growth; success is not guaranteed simply by being in a growing market.

No, each has distinct advantages and disadvantages. Online markets offer global reach and lower fixed costs but face intense price competition, high distribution costs, and security concerns. Physical markets provide a tangible customer experience, immediate product availability, and personal service, but have high overheads and limited geographical reach. The 'better' option depends entirely on the product, target audience, and business strategy. Many successful businesses use a hybrid 'clicks-and-mortar' approach.