The concept of “market” is essential in the study of economics and business. A market is simply a location where buyers and sellers meet to exchange goods and services. An industry or sector’s level of competition is described by this phrase. A market, as used in marketing, is a collection of customers who share similar requirements or interests. However, based on a few factors, markets can be divided into two primary categories.
1. A perfect market for competition In a market with perfect competition, there are many buyers and sellers, but there is no price regulation. No single buyer or seller can affect the market price in this kind of market. In a market with perfect competition, all products and services are homogenous, or identical or very similar. Products used in agriculture, such as wheat, rice, and corn, are examples of markets that are ideal for competition. The dynamics of the market—supply and demand—determine the price in such markets.
2. A market with imperfect competition On the other hand, a market with imperfect competition is one in which a select few vendors are in charge of setting the price. No single buyer or seller can affect the price in this kind of market. In a market with imperfect competition, the products or services offered are diverse, or different. The technological sector, where market leaders like Apple, Samsung, and Microsoft dominate, is an example of an imperfectly competitive market. In these markets, the seller sets the price rather than just supply and demand.
So, in marketing, what exactly is a market? A market, as used in marketing, is a collection of customers who share similar requirements or interests. Based on characteristics such as behavior, psychographics, and demography, a corporation can divide the market into various categories. Companies can develop focused marketing efforts that appeal to their target population thanks to segmentation. For instance, a business that sells cosmetics might divide the market into various age brackets and develop unique marketing plans for each group.
In conclusion, it is essential for any organization or marketer to comprehend the two primary types of markets. It aids in their comprehension of the level of industry competitiveness and strategies for contending successfully. Additionally, knowing the different market segments enables businesses to develop marketing efforts that are relevant to their target market.