6.5 - Importance of Growth, Share and Size of Makets

Market growth is the percentage incremental increase in the size of a market. For example, we might say a market is growing at 10% per annum.

The market size measure the total sales by business that supply products or services to that particular market.

Both market size and market growth can be measured by value and volume.

The measurement by value refers to the growth rate as being determined by the amount of units the business sold.

Economic factors like interest rate, price of other products and services, disposable income of customers and inflation can affect the size and growth of a market. Market share is the proportion of the total market which a specific product or business controls. It's measured by volume of value. The market strategy of a business is evaluated by the amount of market shares it holds.

The market share is usually used by businesses to ascertain it's success or failure. In comparison to it's competitors, a business would use the market share position to clearly see who the major performers are whether or not it's in the league.