The Market

Market can be viewed as the context within which voluntary exchanges among buyers and sellers take place.

Essentials of marketing:

1. A place

2. Goods and services

3. Buyers and sellers

4. Communication

CLASSIFICATION OF MARKETS

Markets are classified based on various criteria as presented hereunder:

1) On the Basis of Number of Commodities

a. General Markets: In general markets, all types of commodities are sold. These commodities for example range from foodgrains to textile goods and so on.

b. Specialized Markets: Specialized market deals with a specific commodity. The markets are named after such commodities. For example, if vegetables are sold in the market, we call such markets vegetable markets. Similarly, markets transacting goods like wool, cotton, jute, and fish are called the wool market, cotton market, jute market, and fish market respectively.

2) On the Basis of Market Area

a. Local Markets: These markets are also called village markets or primary markets or hats. The area covered by the market is limited to some groups of villages, which are nearby or close to each other. In these village markets, perishable commodities like vegetables, fruits, fish, milk, etc., are being transacted. Shandies, fairs, etc., which are held occasionally on special important days would also come under local markets or primary markets. In some areas, local markets are being conducted daily, while in other areas, these are conducted once a week or twice a week. Tribal markets in Madhya Pradesh are a sort of primary markets. Cattle markets, sheep markets, etc., come under primary markets.

b. Regional Markets: Here the area of operation of the market is relatively larger than that of the local market. This market covers four to five districts. Sometimes regional markets cover a State. Food grain markets are the examples to be cited under regional markets. Fruit markets operated in the State are called regional markets. They are regular in conduction business transactions in notified commodities.

c. National Markets: These markets cover the entire country in their operation. National markets are found for commodities having demand over the entire country. Textile markets, jute markets, tea markets, etc., are the relevant examples.

d. International Markets: Here the commodities are sold in all the nations of the world. The market area of operation is extended over the entire globe. These markets exist for commodities like cashew, coffee, tea, spices and condiments, gold, silver, diamonds, machinery, etc. Recently, even textiles, rice, wheat, sugar,, cut flowers, fruits, processed products, etc., have an international market.

3) On the Basis of Location

a. Village Markets: The area of operation of these markets is confined to a small village or a group of villages. Major transactions of goods and services take place among the buyers and sellers of these villages. Such markets may be regular or occasional in their operation.

b. Primary Wholesale Markets: These are located in big towns or taluks or Mandal headquarters. All types of agricultural commodities from the village markets are pooled here. Transactions take place between the producers and the traders.

c. Secondary Wholesale Markets: These markets are found in the district headquarters dealing with major agricultural commodities like rice, pulses, oilseeds, chilies, etc. Wholesalers and village traders are the main participants in these markets. The bulk of the arrivals comes from primary wholesale markets or village markets. Transactions of the commodities take place in large quantities. We find many commission agents, brokers, families, weighmen, etc., working in these markets for facilitating marketing operations.

d. Terminal Markets. These are located in big cities/State capitals/seaports. These are well–organized markets and controlled by the Government to see that all modern methods of marketing operations take place. Processing and storage activities are predominant in these markets. Consumers, wholesalers, and marketing agents are seen in these markets with rigorous transaction activities. Future marketing or forward marketing takes place in these markets. These are situated in big cities like Chennai, Bangalore, Mumbai, etc.

e. Seaboard Markets: These are primarily meant for the export and import of commodities. Scientifically standardized and graded commodities are transacted. These are located in Mumbai, Chennai, Kolkata, Visakhapatnam, etc.

4) On the Basis of Time

a. Short Period Markets: These are held for a brief period in a day. Here the supply of the commodity is fixed. Fish markets in a particular place i.e., village or town or city, vegetable markets, flower markets, etc., are to be cited here. Since supply is fixed here, we can notice price variation based on demand in a day in the transaction of these commodities. Here the supply is zero elastic.

b. Long Period Markets: Durable commodities, which can be stored for some time, are transacted in these markets. The prices for the products are governed by supply and demand. The examples are foodgrains, oilseeds, etc.

c. Secular Markets: These are permanent markets. Manufactured goods, machinery, etc., are transacted in these markets. Godown facilities and processing facilities are highly developed in these markets. These are well-organized markets. They deal with export and import transactions.

5) On the Basis of Volume of Business

a. Wholesale Markets: When large quantities of a commodity are brought and sold in the market among the traders, such markets are called wholesale markets.

b. Retail Markets: These are the markets in which retailers sell commodities to the consumers in very small quantities as per their requirements. Producers, retailers, and consumers are seen in these markets.

6) On the Basis of Nature of Transaction

a. Cash Markets: If there are cash transactions in buying and selling of the goods, such markets are called cash markets or spot markets.

b. Future marketing: These are the markets in which future sales and purchases of commodities take place at the current time. This process is called hedging.

7) On the Basis of Competition

On the basis of competition, the markets are categorized into perfectly competitive markets and imperfectly competitive markets.

8) On the Basis of Government Intervention and Regulation

a. Regulated Markets: The statutory market committees govern regulated markets and the Government from time to time makes marketing acts. The marketing costs, margins, fees, etc., are standardized. Marketing practices are regulated and facilities created for the smooth conduct of marketing. Prices prevailing in different markets are displayed through various mass media.

b. Unregulated Markets: In unregulated markets, business is conducted without and supervision. There is an absence of rules and regulations. The middlemen exploit the farmers and the consumers to the maximum extent. Sometimes producers are put to loss as middlemen exploit them in weighment, measurement, payment, etc. to loss as middlemen exploit them in weighment, measurement, payment, etc.

9) On the Basis of Nature of Commodity

a. Commodity Markets: Commodity markets deal with the buying and selling of commodities. Examples are the cotton market, wheat market, chilies market, cattle market, bullion market, etc.

b. Capital Markets: Capital markets are those markets in which shares, securities, bonds, etc., are being purchased and sold. Share market and money market are the specific examples.

10) On the Basis of Vision

a. Black Market or Invisible Markets: In these markets, the goods are not placed in the shops, but they are kept in the godown of the market. Hence, the name black market. The goods cannot be seen by the naked eye. On-demand, the goods are delivered to the buyer on cash transactions. Any good, which is in short of supply, and anything which is having high effective demand will be sold in the black market. During wars, drought, floods, catastrophes, etc., there is a rigorous black marketing activity for scarce goods. Black markets are closed markets.

b. Open Markets or Visible Markets: These are visible markets and transactions that take place between buyers and sellers and sellers and the price is determined by demand and supply.