Mass and niche markets, market size and market share

What a market is

A market is any place or system where buyers and sellers exchange goods or services. It may be a physical place (a street market), a network (a stock exchange) or online (an app store).

• Market size is the total sales of all businesses in the market over a period. It can be measured by value (revenue, for example $2bn a year) or by volume (units sold, for example 40 million cups).
• Market growth is the percentage change in market size over a period:

market growth (%) = (size this year - size last year) / size last year x 100

• Market share is one firm's (or brand's) sales as a percentage of total market sales:

market share (%) = firm's sales / total market sales x 100

A firm can grow its sales while losing market share if the market grows faster than it does.

Mass markets

A mass market is a large market where products are standardised and sold to a wide range of customers (bottled water, smartphones, supermarket groceries).

Characteristics:

• High volume, often low prices and low profit margins per unit.
• Large firms with big market shares, which can gain economies of scale (lower average cost from producing on a large scale).
• Heavy spending on national advertising and brands to stand out.
• Price competition is common.

Risks: intense competition, and the need for high investment to compete.

Niche markets

A niche market is a small, specialised part of a larger market whose customers have particular needs (gluten-free bread, left-handed guitars, luxury watches).

Characteristics:

• Low volume, often higher prices and higher profit margins per unit.
• Fewer competitors at first; customers are often loyal.
• Products are tailored, and marketing can be targeted (specialist magazines, social media groups).

Risks: a small customer base, so a change in taste hits the firm hard; success attracts large firms into the niche; few economies of scale, so unit costs are high.

Brands matter in both markets: in mass markets they create recognition among many similar products; in niche markets they signal exclusivity and quality.

Real data: the GB grocery market

Kantar's grocery market share figures for the 12 weeks to 30 November 2025 (published 9 December 2025) show a mass market dominated by a few large firms: Tesco 28.3%, Sainsbury's 16.0%, Asda 11.5%, Aldi 10.5%, Morrisons 8.3% and Lidl 8.1%. Together these six held 82.7% of the market. Kantar also reported that Lidl's sales grew by 10.2% over the period, its ninth consecutive month of double-digit growth.

Exam tip: the June 2024 WBS11 paper asked for a market share calculation and the October 2024 series paper for a revenue calculation using market share, each worth 4 marks. Give the answer with the % sign (and to 2 decimal places if asked); the mark schemes gave only 3 of 4 marks for a correct number without the unit.

Worked example

A coffee market has total sales of $80m this year, up from $64m last year. Brew Co sold $12m this year and $10m last year. Calculate market growth and Brew Co's market share in each year, and comment.

1. Market growth = (80 - 64) / 64 x 100 = 25%.
2. Brew Co's share last year = 10 / 64 x 100 = 15.63%.
3. Brew Co's share this year = 12 / 80 x 100 = 15%.
4. Brew Co's sales grew by 20%, slower than the market's 25%, so its share fell.

Answer: Market growth 25%; share fell from 15.63% to 15% even though sales rose.

Check yourself

1. A smartphone market has sales of $500m. One brand sells $85m. Calculate its market share.
   Show answer

   17.0 %. 85 / 500 x 100 = 17%.

2. A market grew from $240m to $276m in a year. Calculate the market growth rate.
   Show answer

   15.0 %. (276 - 240) / 240 x 100 = 15%.

3. Kantar's figures for the 12 weeks to 30 November 2025 gave Aldi 10.5% and Lidl 8.1% of the GB grocery market. What was their combined market share?
   Show answer

   18.6 %. 10.5 + 8.1 = 18.6%.

4. A market is worth $170bn. A firm has a 3.6% share. Calculate the firm's sales, in $bn, to 2 decimal places.
   Show answer

   $6.12 bn. 170 x 3.6 / 100 = $6.12bn.

5. Which is most likely to be a characteristic of a niche market?
   • Standardised products sold in very high volumes
   • Products tailored to a specific group, often sold at a premium price
   • Large economies of scale for every firm
   • Many large firms competing mainly on price
   Show answer

   Products tailored to a specific group, often sold at a premium price. A niche serves a specialised segment, often at higher prices and margins.

6. A firm's sales rose by 5% while the market grew by 12%. What happened to its market share?
   • It rose
   • It stayed the same
   • It cannot have changed because sales rose
   • It fell
   Show answer

   It fell. Its sales grew more slowly than the market, so it now has a smaller percentage of the total.

7. Explain one risk for a small business of operating in a niche market.
   Show answer

   The customer base is small, so if tastes change or a large firm enters the niche, sales could fall sharply and the business may not survive.. A small, specialised customer base makes the firm vulnerable to changes in taste or the arrival of large rivals.

8. A firm measures market size as 40 million units sold per year. This is market size by
   • volume
   • value
   • share
   • growth
   Show answer

   volume. Units sold is volume; revenue is value.

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Sources

• Pearson Edexcel International Advanced Subsidiary/Advanced Level in Business specification (2018)
• Kantar Worldpanel GB grocery market share, 12 weeks to 30 November 2025 (published 9 December 2025)
• Pearson WBS11/01 mark scheme, June 2024
• Pearson WBS11/01 mark scheme, October 2024 series (published January 2025)

Last updated 8 November 2026. Spotted a mistake? Tell us.