Lecture Notes: Calculating Market Growth

Introduction

• Focus: How to calculate market growth
• Importance: Understanding market attractiveness and business market share
• Future Videos: Strategies for high growth markets

Key Concept: Market Growth

• Definition: Percentage change in market size over different periods
• Measurement:
  • Total value of sales
  • Total value of profits
  • Volume of products sold

Real-Life Examples

Smartphones Market

• Significant growth over seven years
• 2009: 173 million units sold
• 2015: ~1.4 billion units sold
• Companies interested: Samsung, Huawei, Xiaomi, Apple

PCs Market

• Decline in market size
• 2010: 157 million units shipped
• 2015: 113 million units shipped
• Negative growth rate

Calculation Method

• Formula:
  • Compare two values (current period vs previous period)

$$\text{Market Size This Period} / \text{Market Size Previous Period} - 1 \times 100$$

Example Calculations

Smartphones Data

• 2015: 1.4 billion units
• 2014: 1.30 billion units
• Calculation:
  • 1.4 / 1.3 = 1.1006
  • 1.1006 - 1 = 0.1006
  • 0.1006 \times 100 = 10.06%

PCs Data

• 2015: 113 million units
• 2014: 134 million units
• Calculation:
  • 113 / 134 = 0.8454
  • 0.8454 - 1 = -0.1546
  • -0.1546 \times 100 = -15.46%

Alternative Calculation Method

• Calculate change between units
• Express change as percentage of previous period size

Example Calculations

• Example data (not PCs/Smartphones):
  • 2013 to 2012: Increase of 100,000 units
  • 100,000 / 1,000,000 = 10%
  • 2014 to 2013: Increase of 250,000 units
  • 250,000 / 1.1 million = 22.7%

Index Numbers

• Definition: Comparison against a base year
• Example:
  • Base year (2015) = 100
  • 2016 Index = 105
  • Calculation:
    • (105 / 100) - 1 \times 100 = 5% growth

Conclusion

• Importance of understanding market growth
• Connect with other marketing analysis concepts
• Stay tuned for more videos on market size and market share