Concept of Market and Marketer - Study Notes

Lesson summary

A market is the meeting place of buyers and sellers in an area. This chapter explains what a market is, why it is needed, how markets are classified, who a marketer is, what can be marketed, and the roles and functions of a marketer.

13.01 Meaning and definition of market

• The word market comes from the Latin word Marcatus: trade, commerce, merchandise, or a place where business is transacted.
• Pyle: market includes both place and region in which buyers and sellers are in free competition with one another.
• Clark and Clark: a centre or area in which the forces leading to exchange of title to a particular product operate and towards which the actual goods tend to travel.
• So a market may mean a place, a coming together of buyers and sellers, an organisation for exchange, the act of buying and selling, or an area of commercial demand.

13.02 Need for market

1. To exchange (barter) goods and services.
2. To adjust demand and supply by the price mechanism.
3. To improve the quality of life of society.
4. To introduce new modes of life.
5. To develop products by enhancing the market segment.

13.03 Classification of markets

Area

• Family market: exchange confined within a family or close members.
• Local market: buyers and sellers of a town or village; limited demand, for example perishables like fish, fruits and vegetables.
• National market: goods in demand throughout the country, helped by good transport and communication.
• World market: buyers and sellers from different countries.

Goods

• Produce exchange market: organised wholesale market for agricultural produce, usually one commodity; for example the Cotton Exchange of Bombay.
• Manufactured goods market: leather goods, machinery; for example the Leather Exchange at Kanpur.
• Bullion market: gold and silver; Mumbai, Kolkata, Kanpur.
• Money market: short-term securities and short-term finance.
• Foreign exchange market: international market helping exporters and importers convert currencies.
• Stock market: shares, debentures and bonds; also called the securities market.

Economics

Transaction, regulation and time

• Spot market: goods exchanged and delivered immediately.
• Future market: contracts for future delivery; dealing and settlement on different dates.
• Regulated market: organised and controlled by statutory measures, for example the stock exchanges of Mumbai, Chennai and Kolkata.
• Unregulated market: free market with no statutory control; demand and supply fix the price.
• Very short period market: perishables such as milk, fruits and vegetables; supply does not change and price depends on demand.
• Short period market: supply is adjusted to meet demand, which is greater than supply.
• Long period market: durable goods for longer use.

Volume of business and importance

• Wholesale market: bulk supply to dealers and retailers, not to consumers directly.
• Retail market: retailers sell to customers in small quantities.
• Primary market: farm producers sell their output, mostly in villages.
• Secondary market: semi-finished goods; dealings between wholesalers, or wholesalers and retailers.
• Terminal market: a central site in a metropolitan area that serves as an assembly and trading place for commodities, usually near major transport hubs.

13.04 Marketer

• One who deals in a market; one who promotes or sells a product or service; one who promotes or exchanges goods or services for money.
• Business Dictionary: a person whose duties include identifying the goods and services desired by a set of consumers and marketing them on behalf of a company.

13.05 What can be marketed?

Ten items: goods, services, experiences, events, persons (celebrity endorsement by cinema stars, sports stars, musicians), places, properties (land, buildings, shares, debentures), organisations, information and ideas.

13.06 Role of a marketer

13.07 Functions of marketer

1. Gathering and analysing market information
2. Market planning
3. Product designing and development
4. Standardisation and grading
5. Packaging and labelling
6. Branding
7. Customer support services
8. Pricing of products
9. Promotion and selling
10. Physical distribution
11. Transportation
12. Storage and warehousing