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7.1. Marketing

Syllabus
0264–2027–2028
Topic
7.1
Level
—

Calculating and interpreting market share

Market share is the percentage of total market sales revenue earned by one business. It compares the business with the whole market over the same period and using the same currency.

\text{Market share (%)}=\frac{\text{sales revenue of the business}}{\text{total sales revenue for the whole market}}\times100

If a business earns 36millioninamarketworth36 million in a market worth120 million, its market share is 36m÷36m ÷120m × 100 = 30%. The units cancel because both revenue figures use millions of dollars; the answer is a percentage.

\text{Business sales revenue}=\frac{\text{market share}}{100}\times\text{total market sales revenue}

For a 30% share of a 120millionmarket:30÷100×120 million market: 30 ÷ 100 ×120m = $36m. A market share of 30% does not mean sales grew by 30%; it means the business earns 30% of the market's total sales revenue for that period.