IB Business Management SLTopic 4 — Introduction to MarketingPaper 1 & 2Core idea~9 min read
Introduction to Marketing
Most students think marketing means adverts. It does not. Marketing is the whole job of working out what people actually want, then making sure your business is the one that gives it to them — and still makes money doing it. Everything else in this unit hangs off that one sentence.
📚 What you need to know
A market is any place where buyers and sellers meet to agree a deal — a high street, a website, an app.
Marketing means identifying, anticipating and satisfying customer needs and wants profitably.
Needs are things people must have. Wants are things people would like to have.
Product orientation starts with the product. Market orientation starts with the customer.
Market share tells you how big a slice of the market one firm has. Market growth tells you whether the whole cake is getting bigger.
Niche markets are small and specialised. Mass markets are large and broad.
What marketing actually means
A market does not have to be a physical place. If a buyer and a seller can find each other and agree a price, that is a market. An online marketplace is a market. A car boot sale is a market. The market for insurance is spread across thousands of phone calls and web pages.
The definition examiners want is that marketing helps a business identify, anticipate and satisfy customer needs and wants profitably. Take those four words one at a time, because each one is doing a job:
Identify — find out what customers want now. That is market research.
Anticipate — work out what they will want next. Markets move, so a firm that only looks at today gets left behind.
Satisfy — actually deliver it, through the product, the price, the place it is sold and the way it is promoted.
Profitably — this is the word students drop. A firm can make customers delighted and still go bust. Giving away free coffee satisfies a want perfectly and is terrible marketing.
Needs and wants are not the same thing
A need is essential to live: food, clean water, shelter, warmth. A want is a desire for a particular way of meeting that need. You need food; you want a specific brand of cereal. You need shoes for winter; you want a particular pair of trainers.
This matters because wants are where the profit lives. Needs are usually met by cheap, similar products that compete mainly on price. Wants can be shaped by branding, design and advertising, which is why firms are willing to spend so much on them.
If a question asks you to explain why a firm spends heavily on marketing a fairly ordinary product, the answer is nearly always this: it is trying to turn a need into a want, so it can charge more than a plain substitute.
Product orientation versus market orientation
Every business has to answer one question first: do we start with the product, or with the customer? That single choice changes how the whole firm behaves.
The two routes end in the same place — a product on sale — but one of them checks that somebody wants it before the money is spent.
Point of comparison
Product orientation
Market orientation
Starting point
The idea, the invention, the recipe
The customer and what they say they need
Belief behind it
A good enough product will sell itself
Nothing sells unless somebody wants it
Main strength
Cheap to start, can create brand new markets
Lower risk of a flop, demand is checked first
Main weakness
The firm can drift away from what buyers want
Research costs money and can be out of date
Typical user
Inventors, engineers, small craft producers
Supermarkets, phone makers, service firms
Do not treat product orientation as simply wrong. Genuinely new products cannot be researched properly, because customers cannot describe something they have never seen. The honest answer in an evaluation question is that most firms use a mix: an idea from the workshop, then tested against the market before launch.
Market share
Market share answers one question: how big is our slice? It compares one firm’s sales with the sales of the whole market. It can be measured by sales value (money) or sales volume (units sold), and the two can give different answers — a firm selling cheap items can have a big share of volume and a small share of value.
Market share
market share (%) = (sales of one business ÷ total sales of the market) × 100
WORKED EXAMPLE
A bakery chain had sales of $4.2m last year. The whole bakery market in that country was worth $56m. Calculate its market share to two decimal places. [3 marks]
Step 1: pick out the two figuresFirm’s sales = $4.2m Total market = $56mStep 2: put them into the formula(4.2 ÷ 56) × 100Step 3: work it out0.075 × 100 = 7.5Market share = 7.50%Both figures are in millions, so no unit conversion is needed. Write the formula down even if the arithmetic goes wrong — it usually earns a mark on its own.
Unit trap. If one number is in millions and the other is in billions, convert first. $4.2m out of $5.6bn is not 75% — it is 0.075%. Getting this wrong is the single most common lost mark in market share questions.
Market growth
Market growth looks at the whole market, not one firm. It tells you whether the cake is getting bigger or smaller. Positive growth means the market is expanding; negative growth means it is shrinking.
Market growth
market growth (%) = ((new market size − old market size) ÷ old market size) × 100
WORKED EXAMPLE
A national market for plant-based ready meals was worth $18.5m in 2024 and $21.4m in 2025. Calculate the rate of market growth to two decimal places. [2 marks]
Step 1: find the change in size21.4 − 18.5 = 2.9Step 2: divide by the old size2.9 ÷ 18.5 = 0.156756…Step 3: multiply by 1000.156756… × 100 = 15.6756…Market growth = 15.68%Always divide by the starting year, never the new one. Dividing by 21.4 gives 13.55% and loses the mark.
WORKED EXAMPLE
A market had sales of $640,000 in 2025 and is expected to grow by 12% in 2026. Calculate the predicted market size for 2026. [2 marks]
Step 1: find 12% of the 2025 figure0.12 × 640,000 = 76,800Step 2: add it on640,000 + 76,800 = 716,800Predicted market size = $716,800This is just a percentage increase. Doing 640,000 × 1.12 in one step is fine and gives the same answer.
Share and growth are easy to muddle. Share is about you inside the market. Growth is about the market itself. A firm can lose market share in a fast-growing market and still sell far more than last year — a lovely evaluation point.
Niche markets and mass markets
A mass market aims at a broad group of buyers with a fairly standard product. A niche market aims at a small, specialised group inside that wider market. The niche is not a separate world — it sits inside the mass market, serving a slice of buyers whose needs the big firms have not bothered with.
Notice the niche is drawn inside the bigger box. Both are selling bread — the difference is who they are selling it to and at what price.
Feature
Niche market
Mass market
Product
Specialised, often unique
Standard, similar to rivals
Scale of production
Small, so no economies of scale
Large, so unit costs fall
Average costs
High per unit
Low per unit
Price and volume
High price, low sales volume
Low price, high sales volume
Profit margin
Higher margin on each sale
Thin margin, profit comes from volume
Main risk
The small group of buyers disappears
Heavy competition drives prices down
The trade-off is the point of this table. A niche firm earns more on every single sale but has far fewer sales to earn it on. A mass-market firm earns almost nothing per unit but sells enormous quantities. Neither is automatically better — it depends on the firm’s costs, its capacity and how loyal its customers are.
💡 Exam tip
Show the formula before you calculate. Market share and market growth questions award a mark for the correct method even when the final number is wrong.
Check your units. Millions against billions, units against value — convert before you divide.
Round only at the end. Rounding halfway through changes the answer and can cost the accuracy mark.
Use the stimulus. A question about orientation will hint at the answer: words like “invented”, “engineers” and “quality” point to product orientation; “survey”, “feedback” and “customers asked for” point to market orientation.
For niche versus mass, always mention the cost side, not just the price side. Examiners want economies of scale in the answer.
⚠️ Common mix-up
Marketing is not advertising. Advertising is one part of promotion, which is one of the seven Ps. Saying “marketing means adverts” throws away marks in definition questions.
Market share is not market growth. Share is your slice, growth is the size of the whole cake.
Dividing by the wrong year in a growth calculation. Always divide by the earlier figure.
Assuming niche means small business. Large firms run niche brands too — a big food company can own a specialist organic range.
Treating market orientation as risk-free. Research can be badly designed, out of date, or simply ignored by the people who make decisions.
Forgetting “profitably” when defining marketing. Without it the definition is incomplete.
Up next: Putting a Marketing Plan Together — how a firm turns all of this into an actual written plan, and how it splits a market into segments it can aim at.
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