What is a market

What is a market?

A market is nothing but which consists of all the potential customers or organizations who share a particular need or want.

It may also include the place and region where the buyer and seller are in competition with each other.

A market can be classified based on different approaches or categories.

Classification of markets

There are mainly 5 different types of markets

1. On the basis of Geographical area

2. On the basis of position of resellers

3. On the basis of commodities or goods

4. On the basis of the degree of competition

5. On the basis of volume of business transacted

let’s have a look at each of the types of markets one by one!

1. On the basis of Geographical area

a) National market

Here the market is only with respect to the boundaries of the country.

b) International market

Here the buyers and sellers interactions and transactions take place globally. It takes place beyond the boundaries of the nation.

c) Regional market

It basically covers a particular region of a country for example in India it may be the North Indian market and south Indian market.

d) Local market

The local market is generally used for day to day activities, the goods which are perishable in nature and it consists of only a small area.

2. On the basis of position of resellers

a) Primary market.

Here the products which are produced by agriculture or from industry are being sold to the wholesalers.

b) Secondary market

Here the products from the wholesalers are distributed in small quantities to the retailers.

c) Terminal market

Here the goods which are received by the retailers are sold to the ultimate consumers.

3. On the basis of commodities or goods

a) Produce exchange market

These kinds of markets are found only in the developed countries. This type of market deals with one commodity only.

b) Manufactured goods market

This kind of markets deal with manufactured goods such as leather goods or machinery.

c) Billion market

This kind of market deals with the purchase or sale of gold or silver.

d) Stock market

This kind of market deals with the shares, debentures, mutual funds etc

4. On the basis of degree of competition

a) Perfect market

Perfect  market is when

  • There is a large number of sellers and buyers
  • The sellers market identical products
  • Every buyer and seller has the perfect knowledge of market conditions

b) Imperfect market

If the conditions of the perfect market don’t exist then it is known as the imperfect market.

5. On the basis of volume of business transacted

a) Retail market

Here the goods are sold to the ultimate consumers in small quantities and the products are not purchased for further profit-making.

b) Wholesale market

In this type of market, goods are supplied in bulk quantities to the dealers or retailers.

c) Industrial market

Industrial or b2b markets products will be bought in bulk quantities either for industrial use or for the reproduction process.

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