HookA garage in Birmingham beat the high street giants
In 2012, nineteen-year-old Ben Francis was delivering pizzas by night, studying at Aston University by day, and screen-printing gym vests in his parents' garage in Birmingham in between. Gymshark ignored the high street entirely: no shops, no TV advertising, no wholesale. It sold fitted training wear to a niche the giants had overlooked — young lifters who lived on Instagram and YouTube — and paid fitness influencers in free product years before 'influencer marketing' had a name. In August 2020 the US investor General Atlantic bought a roughly 21% stake at a valuation just over £1bn, making Gymshark one of the very few British consumer brands founded this century to reach that mark.
Strip the story down and it is the whole of 1.1 in one firm: choose your market (niche, not mass), know your customers better than the incumbents do (market orientation, with research done by watching social feeds rather than commissioning surveys), and position yourself where no rival sits on the map (aspirational but affordable). Every question in this section is some version of: whose needs are you meeting, how do you actually know, and why should they buy from you rather than anyone else?
ModelMass, niche and the shape of a market
A mass market sells high volumes of a standardised product to the broadest possible audience — sliced bread, cola, mobile tariffs — where competition compresses prices and economies of scale decide who survives. A niche market serves a tightly defined segment with specific needs: lower volumes, premium prices, fiercer loyalty. Gymshark began as pure niche — conditioning wear for young lifters — because a start-up cannot win a scale war against Nike, but it can out-know a segment.
Measure markets two ways: volume (units sold) and value (pounds spent) — they diverge, and a premium brand can gain value share while losing volume share. Market share is a firm's sales as a percentage of the total market, and it is the scoreboard. Markets are also dynamic: internet sales were about 7% of UK retail in 2010, peaked near 38% in the February 2021 lockdown, and have settled at roughly a quarter — a structural rewiring of where customers are. Finally, the spec's sharpest distinction: risk can be quantified and insured (a delivery van crash); uncertainty cannot (a pandemic, a sudden TikTok boycott). Firms can manage risk; against uncertainty they can only build resilience.
Gousto, the London recipe-box firm founded by Timo Boldt in 2012, reported revenue of roughly £300m in 2021. Suppose the whole UK recipe-box market that year was worth about £1.2bn: Gousto's value share = £300m ÷ £1,200m × 100 = 25%. Now watch the trap: if the market grows to £1.5bn the next year and Gousto grows to £330m, its sales ROSE 10% but its share FELL to £330m ÷ £1,500m × 100 = 22%. A firm can grow and lose ground simultaneously — exactly the distinction 'calculate market share' questions are built to test.
ModelMarket research — knowing rather than guessing
A product-orientated business perfects the product and then looks for buyers — viable where the product is genuinely new (James Dyson built 5,127 prototypes before the first bagless vacuum sold), lethal in crowded markets. A market-orientated business starts from customer needs and builds backwards — the default for modern consumer brands.
Research splits twice. Primary research is new data you collect yourself: surveys, focus groups, interviews, test launches. Secondary research already exists: ONS statistics, Mintel and Kantar reports, competitors' published accounts. And data is quantitative (numbers — measurable, comparable) or qualitative (opinions and motives — rich, but small-sample). The limitations are where evaluation marks live: samples can be small or self-selecting, respondents say one thing and buy another, and findings age fast in dynamic markets. ICT rewrote the economics of all of it: social-media listening gave Gymshark continuous, free feedback; loyalty schemes like Tesco's Clubcard (around 20 million members) turn every checkout into a research instrument; website analytics let firms A/B-test decisions overnight. Segmentation — demographic, geographic, income, behavioural — then turns research into targeting: not 'what do customers want?' but 'what does this segment want?'
ModelMarket positioning — the map, the gap, and the reason to choose you
A market map plots rival brands on two axes — most commonly price against perceived quality — and makes three things visible at once: where the market is crowded, where you sit relative to rivals, and where the gaps are. UK grocery maps cleanly: Waitrose high-price/high-quality, Aldi and Lidl low-price/solid-quality, the Big Four clustered in the middle — which is precisely why the middle has been squeezed from both ends since 2008.
A gap is only an opportunity if demand exists there (a cheap, luxury-quality position would be lovely; nobody can supply it profitably). Filling one needs competitive advantage — lower cost or meaningful differentiation through design, branding, service or speed that rivals cannot quickly copy. Differentiation is what creates added value: the gap between the selling price and the cost of bought-in inputs. Around 30p of beans, milk and cup becomes a £3.40 flat white; the £3.10 difference is branding, convenience and experience — value conjured almost entirely by positioning. Gymshark's chosen spot — more aspirational than supermarket gymwear, cheaper than Nike's premium lines, native to Instagram — was a mapped gap the incumbents had left open.
CaseDynamic markets punish the slow — HMV v Greggs
HMV had been selling recorded music since 1921 and was still Britain's biggest music retailer when it collapsed into administration in January 2013, with more than 200 stores and over 4,000 jobs at risk. The market had not shrunk — music consumption was rising — it had MOVED: downloads, then streaming, then supermarkets and Amazon taking the physical remnant. HMV kept answering a 2000s question ('where do I buy CDs?') long after customers stopped asking it.
Contrast Greggs. Facing shifting tastes, it launched the vegan sausage roll in January 2019 — a product tweak that landed as a national event (Piers Morgan's on-air outrage was free promotion worth millions) — then added delivery partnerships, evening opening and an app. Same dynamic-market pressure, opposite response: HMV defended a format; Greggs updated the offer while keeping its positioning — cheap, fast, everywhere — intact. When an exam extract shows a market changing, diagnose WHAT moved (technology, tastes, incomes, regulation), then judge whether the firm changed its product, its positioning, or nothing. The middle option is usually the winning recommendation; the last one is HMV.
VocabularyKey terms the mark scheme pays for
TrapsMisconceptions that cost marks
ExamWhat examiners want
Theme 1 is examined on Paper 1 (9BS0/01) and again through Paper 3's pre-released context, always via data about a real business. On 'calculate' questions (usually 4 marks), write the formula, substitute, and give the answer with units — market share without the % sign, or market size without the £, drops a mark students never notice losing. If the data lets you, comment on the direction of change: share rising or falling is worth more than the raw number.
On 8- and 12-markers, application is the differentiator. 'Gymshark uses social media research' scores; 'a niche sportswear brand whose customers already live on Instagram gets faster, cheaper insight from social listening than from commissioned surveys' scores higher, because it argues from THIS firm's market. And keep the risk/uncertainty distinction surgically precise: examiners reward candidates who class a competitor's price cut as quantifiable risk but a pandemic as unquantifiable uncertainty — the spec lists them separately, and so do mark schemes.