A market is where buyers and sellers of a product or service come together. The market for payroll services includes every firm that buys or sells them.

Why does a client need to know the size of its market?

Market size shows how much potential revenue is available. A client can judge whether a market is big enough to justify entering or investing in it.

Define the term market share.

Market share is one firm's sales as a percentage of total market sales. The formula is the firm's sales ÷ total market sales × 100.

A Belfast recruitment agency has sales of £3.2 million in a market worth £40 million. What is its market share?

The agency's market share is 8%. The working is £3.2m ÷ £40m × 100 = 8%.

CCEA AS-Level Professional Business Services 3210

The Business Environment

Topic overview Primary, secondary, tertiary and quaternary production Private, public and voluntary sector objectives Sole traders and partnerships Private and public limited companies Stakeholder interests and conflicts Factors of production

The Professional Business Services Sector

Topic overview The nature of professional business services The range of consultancy services Tangible goods and intangible services Local, national and global firms Why businesses use consultancy services

The Consultancy Process

Topic overview The consultancy process and the entry phase The diagnosis phase The action planning phase Implementation and termination phases

Understanding the Client's Market

Topic overview Market size, market share and market growth Reasons for market research and using its findings Primary market research methods Secondary market research and choosing a method Sampling methods in market research Market segmentation

Client Relationships

Topic overview Why client relationships matter Communication, personal contact and client needs Business culture and professionalism Trust, ethical behaviour, intellect and ideas

Business Ethics

Topic overview Fairness, integrity and freedom from bias Trust, confidentiality, transparency and openness The benefits of an ethical code

Persuading, Negotiating and Influencing

Topic overview Persuasion techniques for consultants Negotiation stages and strategies Influencing clients and stakeholders

Business Planning and Risk Management

Topic overview Strategic planning and cost–benefit analysis SWOT and PESTEL analysis in strategic planning The Ansoff matrix and the Boston matrix Assessing and managing business risk

Government Regulation

Topic overview The purpose of business regulation Regulators and compliance in Northern Ireland Codes of conduct versus external regulation

Organisational Structure and Culture

Topic overview Human resources and effective HR management Tall, flat, centralised and decentralised structures Roles, chain of command, span of control and delayering Changing and comparing organisational structures Culture, Schein's model and the McKinsey 7S framework

Recruitment and Selection

Topic overview Internal and external recruitment methods Job descriptions and person specifications Interviews and psychometric testing Competency profiling, situational judgement tests and EI questionnaires Contracts of employment and effective recruitment

Learning and Development

Topic overview Why learning and development matters to a business Induction, on-the-job, off-the-job training and CPD Outcomes of learning and development

Employee Well-Being and Motivation

Topic overview What employee well-being is and why employers value it Methods of supporting employee well-being Causes of low workplace well-being Maslow and Taylor on motivation Herzberg and Mayo on motivation Financial and non-financial methods of motivation

Managing Conflict

Topic overview Functional and dysfunctional conflict Causes of conflict at work Effects of conflict on performance, motivation and behaviour Improving employer–employee relations

Business Research Methods

Topic overview Research aims, objectives and literature searches Questionnaires, interviews and designing research tools Sampling, reliability, validity and research ethics Presenting, analysing and evaluating research findings

Sources of Finance

Topic overview Financial decision making in a client business Internal sources of finance Loans, overdrafts and share issues Leasing, hire purchase and trade credit Choosing the right source of finance

Cash Flow

Topic overview Types of budget and why firms set them Adverse and favourable variances Cash flow, profit and why firms forecast Constructing and analysing a cash flow forecast

Financial Statements

Topic overview Revenue, cost of sales and gross profit Expenses and net profit Assets on the statement of financial position Equity and liabilities

Ratio Analysis

Topic overview Profit margins and return on capital employed The current ratio, liquidity and gearing Trade receivables and trade payables days Earnings per share and return on equity Using and evaluating ratio analysis

Investment Appraisal and Financial Decisions

Topic overview The payback method Net present value and discounting Average rate of return and choosing a method Appraising an investment for a client Using financial data for growth and staffing decisions

Understanding the Client's Market

6 subtopics
18 things to know
AS 1

What Understanding the Client's Market covers

Understanding the Client's Market is examined in Unit AS 1, Introduction to Professional Business Services. It covers market size, market share and market growth, reasons for market research and using its findings, primary market research methods, secondary market research and choosing a method, sampling methods in market research and market segmentation.

Where it is assessed

AS 1

Introduction to Professional Business Services — a written examination.

Check the CCEA specification ↗

The 6 subtopics

Each one has its own page. CCEA AS Professional Business Services students sit this topic in the first year.

What you need to know

Answer each one before you reveal it.

Your recallNot started

Key term

What is exploratory market research, and when would a consultancy use it for a client?

Key term

How can published accounts be used to research a client's market, and what are their limits?

Key term

What is a market?

Key term

What is primary market research?

Key term

Why do market researchers use a sample?

Key term

What is market segmentation?

Key term

Define the term market size.

Key term

What is market research?

Key term

How might a consultancy use a questionnaire to research a client's customers?

Key term

What is secondary market research?

Key term

What is a population in market research?

Key term

What is a market segment?

Key term

What is the difference between measuring a market by value and by volume?

Key term

What is descriptive market research?

Key term

Why should a questionnaire aimed at business customers be kept short?

Key term

What are existing market research reports?

Key term

How is a random sample of a client's customers chosen?

Key term

How can a market be segmented by age?

Take Understanding the Client's Market further

The same content, four other ways.

Commonly confused

Pairs that lose marks when they are blurred together.

Market size vs Market share
Market size: the total value or volume of all sales made in an industry over a period. Market share: one firm's sales as a percentage of all sales in its industry.
Descriptive research vs Explanatory research
Descriptive research: an investigation recording what is happening, such as who buys and how often. Explanatory research: an investigation into why something happens by testing cause and effect.
Predictive research vs Exploratory research
Predictive research: an investigation that forecasts future demand or behaviour. Exploratory research: an early, open-ended investigation used when a problem is still unclear.

Questions from this topic

Each one with the model answer underneath.

1
What is a market?
Model answer
A market is where buyers and sellers of a product or service come together. The market for payroll services includes every firm that buys or sells them.
2
Define the term market size.
Model answer
Market size is the total sales of all firms in a market over a period. Market size can be measured by value in pounds or by volume in units sold.
3
What is the difference between measuring a market by value and by volume?
Model answer
Value measures the total money spent in the market. Volume measures the number of units sold, such as the number of audits carried out.
4
Why does a client need to know the size of its market?
Model answer
Market size shows how much potential revenue is available. A client can judge whether a market is big enough to justify entering or investing in it.
5
Define the term market share.
Model answer
Market share is one firm's sales as a percentage of total market sales. The formula is the firm's sales ÷ total market sales × 100.
6
A Belfast recruitment agency has sales of £3.2 million in a market worth £40 million. What is its market share?
Model answer
The agency's market share is 8%. The working is £3.2m ÷ £40m × 100 = 8%.

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The Business Environment

The Professional Business Services Sector

The Consultancy Process

Understanding the Client's Market

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AA firm might move its staff to a new office.

BA firm might install a new client database.

CA firm might run a graduate recruitment campaign.

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Equity means the owner's investment in the business.

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Understanding the Client's Market revision questions

Is Understanding the Client's Market examined at AS in CCEA Professional Business Services?: Yes. It sits in AS 1, which you take in the first year, so it is on the AS paper as well as counting towards the full A level.
What does Understanding the Client's Market cover in CCEA AS-Level Professional Business Services?: 6 subtopics: market size, market share and market growth, reasons for market research and using its findings, primary market research methods, secondary market research and choosing a method, sampling methods in market research and market segmentation. Each one has its own page with questions and model answers.
How is Understanding the Client's Market organised?: By the CCEA 3210 specification, subtopic by subtopic, so it matches the order you are taught it in.

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