What is Market? Concepts, Meaning & Features of Market

Introduction

Our country, with a population of over 125 crores is one of the biggest markets in the world. Our economy, based on the socialist pattern of growth and development, has moved away from License Raj and a centrally controlled system to a free economy. These reforms in the form of liberalization, deregulation, relaxation of trade and investment controls, and privatization have led to an increase in exports and foreign exchange reserves, higher competition, and efficiency in the marketplace, and availability of a variety of goods and services. So, let’s read further about what is market?

In the olden days, goods were produced based on actual demand and hardly any marketing effort was required. The job of the salesperson was simply to book orders. Remember the days when a person had to make advance payment for a scooter or car and wait in the queue for the delivery! Similarly, the consumer had to wait for years to get a telephone connection. There was a craze for foreign goods such as wristwatches, transistors, television sets, cameras and non-resident Indians returning from Gulf countries used to bring consumer durables which were in high demand in the domesticmarket. Today the situation has completely changed and high quality branded goods are available in the domesticmarket. With liberalisation, production and availability of goods have increased manifold and the consumer can select from a wide range of products and services available. Our country is emerging as a large number of goods and services such as consumer goods, durables, financial services, education, health care, telecommunication and the list continues. The return of multinationals such as Coca-Cola and IBM to India and entry of many other MNCs such as General Electric, Pepsi, Motorola, Proctor & Gamble, Nokia, LG, Ford, Hyundai, Sony, Samsung clearly proves that India has a vast market… rising incomes… a booming middle class, rising rural elites with adequate purchasing power, offering long-term opportunities for Indian as well as foreign industries.

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From Seller’s to Buyer’s Market

There is a definite shift from sellers’ to buyers’ market, from Caveat Emptor (Buyer Beware) to Caveat Vendor (Seller Beware). The essence of the marketing concept is that the consumer shall be the center or the heart of the entire business system. It emphasizes a consumer-oriented marketing process. All business operations revolve around consumer satisfaction and service. The marketing concept advocates serving the consumers and maximizing profits at the same time. The guaranteed route to profits is through customer satisfaction. Profit is a by-product of supplying what the customer wants.

Therefore, marketing is considered the most important activity as it provides goods and services to the society and generates revenue for the
organisation.

market, marketing, what is market

Meaning

The word ‘market’ is derived from the Latin word “Marcatus” meaning goods or trade or a place where business is conducted. Traditionally market refers to a physical location where buyers and sellers gather to exchange their goods. In the market, ownership and possession of products are transferred from the seller to the buyer and money acts as a medium of exchange and measure of value. For example, Product Market (Television Market), Geographic Market (Indian Market).

  1. According to Philip Kotler, “A market consists of all the potential customers showing a particular need or want who might be willing and able to engage in exchange to satisfy the need or want.”
  2. According to William J. Stanton, “A market may be defined as a place where buyers and sellers meet, goods and services are offered for sale and transfer of ownership occurs.”
  3. The American Marketing Association defines a market as “the aggregate demand of the potential buyers for a product or service.”

The MarketConcepts

  1. Place Concept: A market is a convenient meeting place for buyers and sellers to gather together in order to conduct buying and selling activities. It is a physical location where things are bought and sold and where buyers and sellers personally meet to affect purchase and sales.
    Examples: Vegetable/Fruit market.
  2. Area Concept: A market develops in any area, small or large, the moment there are three pre-requisites for exchange:
    • Two or more individuals have unmet wants,
    • They have products to meet the demand, and
    • They have some means of communication such as telephone, fax, correspondence, electronic mail or Internet.
      With the means of communication, forces of demand and supply can freely operate to determine the prices, and buyers and sellers can
      establish close and continuous contacts to carry on the exchange of products without a formal face-to-face meeting.
    • Example: Money market is a highly organized market for the entire nation without any central meeting place for borrowers or lenders of
      money.
  3. Demand Concept: Today, a market is equated with the total demand. Hence, a market means a group of people having unmet wants, purchasing power, and the will to spend their income to satisfy those wants.

    Example: The domestic market for Pharmaceutical products was Rs. 40,000 crores (2010). The human being is a wanting animal, having never-ending, varied, and ever-changing wants. The process of want satisfaction is continuous and sellers want to create, capture and retain the market (customer demand) for their goods.

Features of Market

  1. In a narrow sense, market refers to a particular place whereas in anwider sense any convenient place, region, state, nation and world can be considered as market.
  2. Buyers (demand) and sellers (supply) are the two sides of the market.
  3. The needs of the people, their capacity to spend money, their willingness to part with money, and the availability of goods and services are the requirements of the market.
  4. The meeting of minds is more important than face-to-face meeting, in order to create a market. The transaction can be completed either personally or through agents and through modern communication facilities like fax and Internet.
  5. In the free market system, price is determined by interaction of forces of demand and supply.
  6. Feedback information points out buyers’ post-purchase experience. If buyers’ expectations are fulfilled, seller will get repeated orders. If dissatisfied, buyers will switch to rival brands.
  7. Under market driven approach, consumer service and satisfaction become the focus around which entire enterprise is centred and through demand satisfaction, profit is made even against keen competition.

If you want to know about marketing, here’s a short video 🙂

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