market


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Market

Usually refers to the equity market. "The market went down today" means that the value of the stock market dropped that day.

Market

1. Informal for an exchange or over-the-counter medium for the trading of securities.

2. The economic actors with the need or desire for a certain product. For example, if telephone users desire more efficient service, this is a market for a new company to offer a better product.

3. To take steps to encourage customers to buy a product or patronize a business. See also: Marketing.

Market.

Traditionally, a securities market was a place -- such as the New York Stock Exchange (NYSE) -- where members met to buy and sell securities.

But in the age of electronic trading, the term market is used to describe the organized activity of buying and selling securities, even if those transactions do not occur at a specific location.

market

an exchange mechanism which brings together the sellers and buyers of a product. Markets, in practice, embrace a number of product, spatial and physical dimensions. In terms of product, a market can be defined as consisting of a group of goods or services which are viewed as substitute products by buyers. Thus, from a MARKETING point of view, women's' shoes and men's' shoes would be represented as constituting separate markets, that is, markets catering for the needs of different buyers (see MARKET SEGMENTATION).

Spatially, a market may be local, regional, national or international in scope, depending on such considerations as transport costs, product characteristics and the homogeneity of buyer tastes. For example, because of a high ratio of transport costs to value added, cement and plasterboard markets tend to be localized. Likewise, Bavarian beer caters for a specialized regional taste, while Coca-Cola, by contrast, is sold worldwide as a global brand.

Physically, seller and buyer exchanges may be transacted in a well-defined market place (for example a local fish market or wool exchange), or in a much more amorphous way (for example the buying and selling of stocks and shares by telephone through a nexus of international dealing offices). Finally, in some markets sellers deal directly with final buyers, while in others transactions are conducted through a chain of intermediaries such as wholesalers and retailers, brokers and banks.

Markets constitute the battlegrounds of business. Corporate success depends fundamentally on identifying and exploiting positions of COMPETITIVE ADVANTAGE which requires the effective application of appropriate strategies of PRODUCTION, MARKETING, etc. See COMMODITY MARKET, MONEY MARKET, STOCK MARKET, SPOT MARKET, FORWARD MARKET, INDUSTRY, MARKET STRUCTURE, MARKET-CONDUCT-PERFORMANCE SCHEME, MARKET SYSTEM, EQUILIBRIUM MARKET PRICE.

market

An EXCHANGE mechanism that brings together sellers and buyers of a PRODUCT, FACTOR OF PRODUCTION or FINANCIAL SECURITY (see TRANSACTION). Markets embrace a number of product, spatial and physical dimensions. In terms of product, a market can be defined as consisting of a group of goods or services that are viewed as substitute products by buyers. Thus, from a buyer's point of view, women's shoes and men's shoes would be represented as constituting separate markets, that is, markets catering for the needs of different buyers.

Spatially, a market may be local, regional, national or international in scope, depending on such considerations as transport costs, product characteristics and the homogeneity of buyer tastes. For example, because of a high ratio of transport costs to value added, cement and plasterboard markets tend to be localized. Likewise, Bavarian beer caters for a specialized regional taste, while Coca Cola, by contrast, is sold worldwide as a global brand.

Physically, seller and buyer exchanges may be transacted in a well-defined market place (for example, a local fishmarket or wool exchange) or in a much more amorphous way (for example, the buying and selling of stocks and shares by telephone through a nexus of international dealing offices or the sale of goods on the INTERNET (see E-COMMERCE). Finally, in some markets, sellers deal directly with final buyers, as is the case with telephone insurance and catalogue selling (see DIRECT SELLING/MARKETING) while in others transactions are conducted through a chain of intermediaries such as wholesalers and retailers, brokers and banks.

Economists generally define a market as a group of products that consumers view as being substitutes for one another (that is, they have a high CROSS-ELASTICITY OF DEMAND). This concept of the market may not correspond exactly with INDUSTRIAL CLASSIFICATIONS, which group products into industries (see INDUSTRY) in terms of their technical or production characteristics rather than consumer substitutability. For example, glass bottles and metal cans would be regarded by users as substitute packaging materials but are in fact allocated to different industrial classifications (the glass and metal industries respectively). By contrast, the industrial-classification category of‘steel products’, for example, can encompass such diverse users as civil engineers (reinforcing bars), car manufacturers (car bodies) and white-goods manufacturers (washing-machine shells). However, in the absence of reliable cross-elasticity of demand data, economists are often forced to fall back on industrial classifications as a best approximation of markets in empirical analysis.

The THEORY OF MARKETS distinguishes between markets according to their structural characteristics, in particular the number of sellers and buyers involved. A number of ‘market’ situations can be identified, including:

PERFECT COMPETITION = many sellers, many buyers
OLIGOPOLY = few sellers, many buyers
OLIGOPSONY = many sellers, few buyers
BILATERAL OLIGOPOLY = few sellers, few buyers
DUOPOLY = two sellers, many buyers
DUOPSONY = many sellers, two buyers
MONOPOLY = one seller, many buyers
MONOPSONY = many sellers, one buyer
BILATERAL MONOPOLY = one seller, one buyer

Such a classification serves well for theoretical analysis, and there is no need to make ‘fine’ distinctions relating to the boundaries of the market under consideration. However, from the point of view of applying policy, how widely or narrowly a market is defined depends largely upon the particular issue that the policy is concerned with and the degree of precision appropriate for that policy. For example, for macroplanning purposes, it may be appropriate to refer broadly to the ‘drinks’ market or ‘food’ market. From the point of view of applying COMPETITION POLICY, however, a disaggregation of such groupings into submarkets is necessary. Thus, the drinks market could be divided as between alcoholic and non-alcoholic drinks, and further divided as between the various types of alcoholic beverage - beer, spirits, wines, etc. See CONCENTRATION MEASURES.

Looked at dynamically a typical market will grow, reach maturity (see Fig. 158 , page 431 - PRODUCT LIFE CYCLE) and, in many cases, then decline (for example, the textile, coal and shipbuilding industries in the UK). See also LABOUR MARKET, FOREIGN EXCHANGE MARKET, STOCK EXCHANGE, CAPITAL MARKET, COMMODITY MARKET, MONEY MARKET, FUTURES MARKET.

market

A defined area from which one's customers may be drawn.The market size and boundaries will depend on the product offered (student housing, self-storage, estate lots for custom homes,professional offices for attorneys,etc.). A market can be defined in various ways.For example, it can be defined

1. By a radius from a certain point, such as the market within a 1-, 3-, or 5-mile radius of a development

2. By reference to natural boundaries consumers will not typically cross for goods and services, such as a highway, a particular city street, or even a bridge.

3. As an entire city

4. As all persons of a particular type within a city

An accurate description of one's market is essential to any development planning in order to assess the competition already existing in the market and the need for additional entrants.Market identification and description is also important for advertising and marketing services.(For example,there is no point in spending a large budget on citywide print advertising in newspapers and local magazines if your market lives and works within 3 miles of your location.)

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