Market and its classification


Market and its classification:

Definition – What is Market?

The term ‘market’ derived from Latin word ‘marcatus’ having a verb ‘mercari’ implying ‘merchandise’ ‘ware traffic’ or ‘a place to conduct business. In common words the word ‘market’ means a place where things to be traded and persons are actually present. It is a place where buyers and sellers meet to perform a deal.

In a broader meaning, market is the whole of any region in which buyers and sellers are brought into contact with one another and by means of which the prices of the goods tend to be equalized easily and quickly.

Traditional Classification of Markets:

In common words a market was a physical place where buyers and sellers come together to buy and sell the goods. Researchers explain a market as a compilation buyers and sellers who execute over a specific product or product class. Markets can be classified on different bases as explained further.

1 – On the Basis of Area: According to area, there may be local, regional, countrywide and global markets. Local markets remain confining to locality basically dealing in consumable and semi-perishable items like fish, flowers, vegetables, eggs, milk, and others.

Regional marketplace covers a much broader region can be a district, a state trade in both durable and non durable and commercial products, consisting of agricultural product.

In case of country wide markets the region covered are country wide limitations dealing in long lasting and non-long lasting customer goods, commercial goods, metals, woodland products, agricultural produce.

In case of global wide or global market, the movement of products is considerable at some stage in the world, making it as a unique market. It have to be cited that because of the upcoming technology in transport, storage and packaging, even the maximum perishable items are bought everywhere in the world, now not only that durables.

2 – On the basis of Time: The time period is the factor according to which there may be short period and long period markets. Short-period markets are for rather perishable items of a wide variety and long period markets are for long lasting items of various types can be traded.

3 – On the basis of Transactions: Taking factor of type of transactions, those can be classified in ‘spot’ and ‘future’ markets. In ‘spot’ market, as soon as the transaction happens, the delivery also takes place, whilst in case of future markets, transactions are finalized but delivery and payment remain pending and happen few days later.

4 – On the basis of Regulation: In case of regulation, markets may be divided as regulated and non-regulated. A ‘regulated market’ means when business transactions take place as according to set rules and guidelines regarding, quality, cost, supply modifications and so on. These can deal in agricultural produce and securities. On the other hand, unregulated marketplace is a free marketplace in which there aren’t any fixed rules and regulations; despite the fact that they’re there, they’re amended as required by the parties involved.

5 – On the Basis of Volume of Business: Taking volume of business as a basis, there can be two types of markets namely, “Wholesale” and “Retail”. Wholesale markets are featured by large volume business and wholesalers. On the other hand, ‘Retail’ markets are those where quantity bought and sold is on small-scale. The dealers are retailers who buy from wholesalers and sell back to consumers.

6 – On the basis of Nature of Goods: According to the nature of items, there may be commodity markets, capital markets. ‘Commodity’ markets is the one where dealing is done in favor of material, agriculture produce, goods that are manufactured be customer or commercial related and bullion marketplace dealing valuable metals.

‘Capital’ market is a marketplace for finance. These markets may be further divided into ‘money’ market dealing in lending, and borrowing of money; ‘Securities’ market or ‘stock’ market dealing in trading of stocks and debentures and ‘overseas exchange’ market wherein it is a foreign exchange market dealing buy and sell of overseas currencies can be hard or soft.

7 – On the basis of Nature of Competition: Based on competition or competitive factors, there can be the most important namely, perfect and imperfect markets.

(A). Perfect Market:

(a)  Where there are large number of buyers and sellers

(b) Dominance of single lowest price for goods those are ‘homogeneous’

(c) Buyers and sellers have perfect knowledge of products

(d) Easy entry and exit of companies in market.

(B). Imperfect market:

(a) Products may be alike but not the same

(b) Different prices for a category of goods

(c) Presence of physical and psychological barriers on dealing of goods

(d) Buyers and sellers have no perfect knowledge of products and other dimensions.

8 – On the basis of Demand and Supply: Based on demand and supply or hold of shoppers and dealers, there may be seller’s and buyer’s markets. A seller’s marketplace is one wherein market is sellers oriented and the buyers are on the receiving end.

In different words, it’s a state of affairs in which demand for items exceeds supply. On the opposite hand, buyer’s marketplace is one in which buyers have advantage over sellers. That is, supply can be more than the demand of the items.

Modern Classification of Markets:

The modern classification is based on the consumer orientation because in modern economic system customer is the king-pin and an important driving force.

1 – Consumer Markets: These markets focus on promoting mass client durable and non-durable goods and services and products bargain of time in a try to set up a advanced brand image. These objects can be shoes, apparels, garments, family objects like television, music system, washing machines, coolers, on one hand and tea, espresso, espresso powder, bakery items, dental cream, day care beauty products, rice, wheat, oat, gourmand mixes and so forth the other.

2 – Business Markets: This is a marketplace of corporate buyers and sellers. Business buyers purchase items in order to make or resell a product elsewhere at a profit. Therefore, enterprises are to correctly exhibit as to how their goods will assist the buyers in getting better sales or lesser costs.

Therefore, corporations selling commercial items and services regularly face properly-educated and properly knowledgeable expert customers who have skills in comparing aggressive offerings. These markets deal in raw-materials, fabricated-parts, appliances, equipment services that turn out to be a part of final product of the commercial consumers. Advertising performs its great role.

3 – Global Markets: Global markets have international buyers and sellers. The companies selling products and services in the global market place have to deal global gain involving choice and challenges.

To be successful, the choice of country to be enter is an important factor? Many other things also matters like rules and regulation regarding business and type of customers.

These selections are to be made depending on differing necessities for buying, bargaining, owning, and eliminating belongings, culture, language, and laws and political systems; and the forex that is subject to fluctuations having its personal implications. It is pointless to mention that those items and services each customer and business or industry.

4 – Non-profit and Government Markets: Companies do sell their services and products to non-income corporations like schools and colleges, temples, churches, charitable establishments and to governmental departments at local, state and central level. The corporations that market their services and products should take care of the cost factor as consumers have restrained buying power.