market conduct

market conduct

the behavioural characteristics of suppliers and buyers operating in a MARKET/INDUSTRY. Key elements of market conduct include:
  1. the BUSINESS OBJECTIVES of suppliers (for example profit and sales growth targets), and the product requirements of buyers (for example low prices, product performance and sophistication);
  2. the MARKETING instruments and strategies available to firms which can be used to establish COMPETITIVE ADVANTAGE over rival suppliers. These include various pricing tactics (MARKET PENETRATION PRICING, MARKET SKIMMING PRICING, etc.) and MARKETING-MIX combinations such as advertising and sales promotion, quality variations, packaging and design etc. The choice of appropriate marketing strategies will, of course, vary from market to market depending on product characteristics and, critically, on an understanding of those product attributes which command buyer satisfaction (see MARKET RESEARCH);
  3. the mutual interdependency of suppliers which serves to constrain individual freedom of action and often leads, particularly in markets characterized by high seller concentration, to coordinated behaviour patterns, for example PRICE LEADERSHIP and COLLUSION;
  4. the relationships between suppliers and buyers, in particular the impact of bulkbuying policies (see MARKET CONCENTRATION, MARKET STRUCTURE).

In sum, most markets exhibit both competitive and cooperative tendencies, and firms must be mindful of these forces in formulating appropriate business strategies.

COMPETITION POLICY interest in market conduct is centred on the potentially adverse effect of market power on MARKET PERFORMANCE, either exercised by a DOMINANT FIRM or deriving from collusion between firms. See MARKET STRUCTURE-CONDUCT-PERFORMANCE SCHEMA.

market conduct

the ‘things done’ by firms in their capacity as suppliers (and buyers) of goods and services. Key elements of market conduct include:
  1. FIRM OBJECTIVES, for example, profit, sales and asset growth targets;
  2. the COMPETITION METHODS deployed by firms to achieve their objectives, in particular their policies on PRICE and output levels and PRODUCT DIFFERENTIATION;
  3. INTERFIRM CONDUCT, specifically the extent to which firms in a market compete against each other or seek to coordinate their pricing behaviour (see COLLUSION).

In the THEORY OF MARKETS, market conduct interacts with MARKET STRUCTURE in determining MARKET PERFORMANCE, while market structure and market performance, in turn, affect market conduct. See MARKET STRUCTURE-CONDUCT-PERFORMANCE SCHEMA, PERFECT COMPETITION, MONOPOLISTIC COMPETITION, OLIGOPOLY, MONOPOLY.

References in periodicals archive ?
North Dakota Fines Blue Cross Blue Shield $125K After Market Conduct Exam
Health Insurance Innovations disclosed that together with its subsidiary Health Plan Intermediaries Holdings, it entered into a Regulatory Settlement Agreement with the lead state regulators in the company's previously disclosed multistate market conduct examination.
insurers market conduct actions published by state insurance regulators during 2017 along with data compiled by the company in its most recent annual look at U.S.
The Bangko Sentral ng Pilipinas (BSP) is finalizing a code of conduct governing all trades in the country's foreign exchange market that it intends to implement within the year to further improve transparency, price discovery and market conduct.
SEU said, 'Their constant assessment consists of a market entry review, prudential and market conduct supervision with on-site supervision and, when needed, a market exit procedure.
CBK tells off Treasury over proposed Financial Market Conduct Bill
She has a broad range of experience in product and program design and analysis; regulatory compliance, market conduct, criminal and regulatory investigations related to the conduct of the business of insurance; licensing; corporate reorganizations; and the regulatory components of complex insurance transactions, including asset diligence.
The Financial Conduct Authority (FCA) has found that Mr Danziger was knowingly concerned in RBS's failure to observe proper standards of market conduct and has determined that he is not a fit and proper person because he acted recklessly and lacks integrity.
* Global regulators have levied over USD 26.41bn in market conduct fines since 2012
They are independent contractors retained and appointed by an insurance commissioner to conduct a market conduct, financial examination, or an aspect of an examination.
The people who speak for consumers at the National Association of Insurance Commissioners are furious about an effort to postpone the first due date for a new market conduct reporting form by three months.
Today's regulatory oversight of insurance -- still the purview of the states -- is designed to maintain a competitive balance in the industry, largely by focusing on two distinct aspects of insurance: financial regulation and market conduct. The financial regulation we see today isn't much of a mystery to the carrier or the regulator.