What is defined as the percentage of all sales of a product that one business receives?

Prepare for NCEA Level 2 Business Studies Test. Study comprehensively with flashcards and varied question formats, each offering hints and detailed explanations. Ready yourself for success!

The correct answer is market share. Market share is a way of measuring a company's success within its industry, expressed as a percentage of total sales in the market attributed to a particular business. It reflects how much of the market's sales volume is captured by a specific company, offering insights into its competitiveness and position relative to competitors.

Understanding market share is vital for businesses because it indicates both the company's performance and its ability to grow within the market. A higher market share often correlates with stronger brand recognition and customer loyalty, which can lead to enhanced profitability and sustainability for the business.

Profit margin, on the other hand, refers to the difference between a company’s revenues and its costs expressed as a percentage of revenue, focusing on profitability rather than sales volume. Return on investment measures the efficiency of an investment relative to its costs, indicating how effectively a company is using its investments to generate earnings. Sales volume simply refers to the total quantity of products sold, without considering the overall market context or share relative to competitors.

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