The word 'market' was derived from the latin word "Mercatus" which means trading or place of transactions. As the word "Marketing" has been formed from the word market, It is the mechanism by which buyers and sellers meet directly or indirectly for the exchange of goods and services in terms of monitory value. It is necessary to be clear about the concept of a market in the marketing subject. The various concepts of market are as follows:
- Place Concept
- Commodity Concept
- Exchange Concept
- Area Concept
- Demand Concept
- Space Concept
Place Concept
According to this concept, there are some comfortable place,where sellers and customers meet together and goods and services are exchanged for money. It refers to the particular place only so it is considered as a traditional concept. New Baneshwor, New-Road, Ason etc are the examples of New concept of a market.
According to W.J Stanton, "A market can be defined as a place where buyers and sellers meet and function goods and services are offered for sale and transfer of ownership of title occur".
Commodity Concept
The commodity concept of the market gives emphasis on the commodity or product. It gives more importance in buying and selling of goods or services. It does not give priority to the particular place or area. It needs commodities or services, buyers and sellers and relations or interaction among them.
According to Champman,"The term market refers not only to the place but to a commodity or commodities and buyers and seller and they should be in direct competition with one another".
Exchange Concept
Exchange concept is another important concept of a market. Exchange concept of market puts emphasis on the mutual meeting between the buyer and the seller and their free relationship. Its premise is that exchange should be voluntary, buying and selling between the buyer and seller should be free and the price of the same goods should be equal to that of the competitors.
According to Cournot, "By term market, we mean not any particular market place in which things are bought and sold, but a whole of any region in which buyers and sellers are in such free intercourse with one another that the prices of some goods tend to equality easily and quickly".
Area Concept
The area concept of the market is related to exchange concept. This concept places emphasis on free association between buyers and sellers to fix the price of goods for buying and selling. But fixation of price implies in the certain area from a free interaction between demand and supply. From this, it is not necessary to have a direct meeting or discussion between the buyers and sellers. They establish the close and regular relationship through different modern communication media and exchange goods or services.
According to Philip Kotler,"Market is an area of potential exchanges that is a group of buyers and sellers interested in negotiating the terms of purchase and sale of goods and services".
Demand Concept
The market can be studied from the perspective of demand or customer concept. According to this concept, the aggregate demand by potential buyers for any product is the market. Prof. W. j Staton has said, "Market may be defined as aggregate demand by potential buyers of a product or services,". He says that meaning of market is to supply the needs of people, for this, they become ready to spend money and finally spend it. Human needs are unlimited when one need has been satisfied another need appears so, need satisfaction is a newer ending process.
Space or Digital Concept
Space or digital concept has developed as a new technology of market. Nowadays buying and selling can be performed without direct or interaction between the buyer and the seller because of the increasing use of information technology, buying and selling have become possible between the person,one living in one corner and the other in another corner of the world. The digital communication media like telephone, telex, computer, Internet etc. have made the direct contact between the customer and the seller minor matter.
Types of market
Market can be classified on the different basis.
On the basis of Geographical Area
The market limited to a certain place of a country is called local market. This type of market locals in a certain place of a city or any area and supplies needs and wants of the local people. Perishable consumer products such as milk, vegetables, fruits etc. are sold and bought in the local market.
The market which is not limited to a certain place but expanded at a regional level is called regional market. Mostly,food grains such as wheat, paddy, maize, millet, sugar, oil etc are bought and sold in such regional markets.
National Market refers to the market that is limited within the geographical area of any country. The products like tea, clothes, cement, Rum Pum noodles are found in different parts of a country.
International market refers to the market in which products produced by one country are sold in two or more countries of the world. It is also known as global market or import-export market. Toyota, Honda Bike, Philips and Sony products etc. are exchanged worldwide.
On the basis of Subject Matter of Sales
The commodity market is a physical or virtual marketplace for buying, selling and trading raw or primary products. Physical goods can be sold either to producers, middlemen or consumers in the commodity market. Vegetable market, carpet market and garment market are the examples of commodity market.
In service market, customers do not get the physical product but they get certain types of services of their satisfaction. Communication facilities, transportation facilities, beauty parlor service etc. are the examples of Service market.
The market of money and financial instruments is called financial market. In such types of market money, shares, debentures, treasury bills, commercial markets security exchanges, loan giving or taking etc. are dealt. Dealing with the short-term fund is called money market and dealing with the long-term fund is called capital market.
A labor market is a place where workers and employees interact with each other. According to the qualification and experience of the labor, employment is provided by the employers. Under this skilled and unskilled employees of Nepal get job opportunities in different countries like Korea, Malaysia, Saudi Arabia etc.
On the Basis of Competition
The market where production, distribution, price determination activities are performed by a single person is called Monopoly Market. The price is determined by the interests of suppliers in the market.Nepal oil Corporation and Nepal Electricity Authority etc have monopoly market in Nepal.
- Perfect Competition market:
In perfect competition market, the number of buyers and sellers are large, homogeneous products are bought and sold. The price of the product is determined by an interaction of both buyers and sellers .
- Imperfect Competition market:
Imperfect competition market is the market where there is no perfect competition between buyers and sellers .Buyers are not aware of the product and price in this type of market.
On the basis of Volume of Business
The wholesale market is defined as the market where large amount of products are purchased by the buyers or sold by the sellers. For examples, Kalimati vegetable market is the wholesale market of vegetable.
The retail market is the place where small amount of products are purchased by the buyers from the sellers. For example, clothes, shoes, vegetables etc.
On the basis of Control
The market which is operated under control of any government body or any organization etc is called controlled market. It is also called regulated market. Foreign exchange market, a market of petroleum products in Nepal are the examples of the controlled market.
The market which is freely functioning without control of any organization, customers association etc is called uncontrolled market. The businessman has a freedom to determine the price, production of goods, the sale of product etc in this market. T.V, clothes, computer etc are the examples of the uncontrolled market.
On the basis of Delivery of Goods
The market where delivery of the goods are made immediately after sale is called spot market. In other words, it transfers ownership by a seller, receiving ownership by a buyer, paying the price of a product and receiving the amount by the seller are performed at the same time.
Buying and selling agreements are signed by the buyer and seller for future without making delivery of product at present is called future market. In other words, an agreement is made at present but a transfer of ownership and receiving ownership activities are performed in future.
On the basis of Seller's Position
The market in which buyers and sellers negotiate and transact business directly without any intermediary such as resellers is called primary function. Here, goods are sold first time by producers with the primary issue of the share/debenture.
The market in which the position of the seller is in second place. It means goods once sold by a primary seller are sold by the secondary seller to the buyers. For examples: sale of share or debenture by a shareholder is through stock exchange.
In terminal market buying and selling activities are performed between retailer and consumer. For example, if the consumer purchases radio from a retailer, it is called terminal market.
Features of Market
There must be buyers and sellers to be a market. The sellers should be able to supply goods or services according to the demand of the customers. But it is not compulsory to have a direct meeting and interaction between them. Buying and selling of products or services can take place by establishing indirect contact between buyers and sellers, that is through the correspondence, telephone, telex etc. However, customers and sellers or demand and supply are very important elements to market.
There must be certain products to be a market. Goods, services, ideas etc. are taken as products. But the market may be different for different products. For example: the market of books, the market of foodstuff, the market of shoes, the market of readymade garments etc.
There should be the certain price of the products to be a market. The customer should pay certain price for the product. Some economists have put forth their views that the price of a certain product should be fixed same in the whole market area through competition between buyers and sellers but in practice, the price of the same product may be different in the market due to imperfect competition between buyers and sellers and to some extent due to monopoly of the sellers on some product.
There should be certain area of market. The area doesn't refer to specific place rather it indicates the whole geographical area where free relationship is established between buyers and sellers. Such an area remains limited to the local level for certain products and for some other products the entries nation or the world becomes a market.
In a market, the ownership of a product is transferred to a buyer from a seller. Money acts as a medium of exchange for ownership transfer. Hence, there should be the features such as buyers and sellers or demand and supply of goods or services, determined price, certain area, ownership transfer etc to be a market.
References:
Koirala, Dr. Kundan Dutta. Elementary Marketing. Kathmandu: Buddha Academic Publishers and Distributors Pvt. Ltd, 2014.
Thapa, Gopal, Dipendra K. Neupane and Dilli Raj Mishra. Introduction to Marketing. Kathmandu: Asmita Books Publishers and Distributors (P) Ltd., 2014.