What is Market, Types of Markets, What is Marketing, Marketing Mix and Target Market, Marketing & Marketing Strategies, Practical Assignments

What is Market, Marketing & Marketing Strategies?

What is Market, Marketing & Marketing Strategies?


What is a Market?

To develop the mechanics of supply and demand, we must narrow our vision to study of how a single market works. In each market, buyers and sellers are guided by the price system in their buying and selling decisions.

Types of Markets:

A retail store, a gas station, a farmers' market, real estate firms, the New York Stock Exchange (where stocks are bought and sold), Chicago commodity markets (where livestock, grains, and metals are traded), auctions of works of art, gold markets in London, Frankfurt, and Zurich, labor exchanges, university placement offices, and hundreds of other specialized arrangements are all markets. Markets are arrangements for bringing together buyers and sellers of a particular good or service. The New York Stock Exchange brings together by means of modern telecommunications the buyers and sellers of corporate stock. Sothebys auction in London brings together the sellers and buyers of rare works of art. The Rotterdam oil market brings together buyers and sellers of crude oil not under long-term contracts. The university placement office brings university graduates together with potential employers. The gas station brings together the buyers and sellers of gasoline. In some markets, the buyers and sellers confront each other face-to-face (roadside farm markets). In other markets, the buyer never sees the seller (the Chicago commodity markets).

Determinants of the Form of the Market:

The actual form a particular market takes depends on the type of good or service being sold and the costs of transporting the good from the point of production to the point of sale. Some markets are local (bringing together local buyers and sellers); others are national (bringing together the buyers and sellers in all parts of the nation), others are international (bringing together the buyers and sellers in all parts of the world). Real estate is traded in local markets; houses and buildings cannot be shipped from one place to another (except at great expense). College textbooks are usually exchanged in a national market. The New York Stock Exchange, the various gold exchanges, and the Chicago commodity exchange are markets in which buyers and sellers from around the world participate.
The study of marketing arrangement is a subject area in which economics and business administration overlap. Both disciplines presume the markets develop in an orderly fashion and teach that the market form that eventually evolves may be the one that keeps the cost of delivery (or marketing cost) to a minimum.

Perfect Markets:

The real world consists of an almost infinite variety of markets. We are going to focused our attention on a very special type of market, called a perfect (or perfectly competitive) market. The principal characteristic of a perfectly competitive market is that buyers and sellers face so much competition that no person or group has any control over the price. The markets where most people buy and sell goods are not perfect. Buyers and sellers may not be perfectly informed about prices and qualities. Two homemakers pay different prices in adjacent grocery stores for the same national brand of cookies. Houses that are virtually identical sell at different prices. Italy and West Germany pay different prices for the same grade of imported crude oil. Two secretaries with the same qualifications, responsibilities, and disposition in the same company earn different wages. AT&T, General Motors, and Saudi Arabia exercise some control over the prices they charge. Large buyers exercise some control over the prices they pay.
Many products, however, are exchanged in perfect markets. Stocks and bonds and commodities such as wheat, silver copper, gold, foreign currencies, oats, pork bellies, soybeans, lumber, cotton, orange juice, cattle, cocoa, and platinum are bought and sold in perfect markets. Private investors, mutual funds, commercial banks, industrial buyers of commodities, and agricultural brokers participate in these markets. Although markets like the local grocery store, the dry cleaner, the gas station, the college placement office, or the roadside stand are not perfect, many of them function in a way that approximates perfect markets. In this respect, the behavior of perfect markets serves as a useful guide to the way many real-world markets function. The perfect market is a valuable starting point for examining economic behavior.

Practical Assignments:

1. Answer the questions.

  1. What does the concept of "market" mean?
  2. What are different forms of the market? 
  3. Do buyers and sellers always meet each other in markets? 
  4. What do the terms "a local market", "a national market", "an international market" mean? 
  5. What are the principal characteristics of a perfect market? 
  6. What products are exchanged in perfect markets? 
  7. Who are the participants of a perfect market? 

2. Read the statements and say whether they are true or false.

  1. In each market, buyers and sellers are guided by the price system.
  2. The university placement office brings university graduates together with sellers. 
  3. Sothebys auction in London brings together the buyers and sellers of gasoline. 
  4. The New York Stock Exchange is one of the markets in which buyers and sellers from around the world participate.
  5. One single seller can change the price.

3. Find equivalents.

1. price .................... a) a place where people buy and sell goods
2. trade ....................b) an article of trade
3. market ................ c) to put (money) to a particular use
4. invest .................. d) a person who buys
5. buyer .................. e) an amount of money for which a thing is sold
6. commodity ......... f) to buy and sell goods

4. Fill in the blanks using the essential vocabulary. 
  • What ........ did you pay for the house? 
  • The fall in the value of the pound may help to stimulate international ........ 
  • Your bank manager will advise you how to ........  your money. 
  • The law forbids the ........ of alcohol to people under 18. 
  • Britain built up her wealth by ........ other countries. 
  • If the book is properly ........  it should sell very well.

5. Choose the right variant.

Sothebys auction in London brings together the sellers and buyers of 
  • rare works of art 
  • gasoline
  • corporate stock

Houses that are virtually identical sell 
  • at the same prices 
  • at different prices 

In perfect markets
  • wheat, oats and cotton
  • silver, copper and gold 
  • soybeans, orange juice and cocoa
  • all mentioned above and many other things are sold and bought

What is Marketing?

Buying, selling, market research, transportation, storage, advertising- these are all parts of the complex area of business known as marketing. In simple terms marketing means the movement of goods and services from manufacturer to customer in order to satisfy the customer and to achieve the company's objectives. Marketing can be divided into four main elements that are popularly known as the four P's: product, price, placement and promotion. Each one plays vital role in the success or failure of the marketing operation.

The product element of marketing refers to the good or service that the company wants to sell. This often involves research and development (R&D) of a new product, research of the potential market, testing of the product to insure quality, and then introduction to the market.

A company next considers the price to charge for its product. There are three pricing options the company may take: above, with or below the prices that its competitors are charging. For example, if the average price of a pair of woman's leather shoes is $27 a company that charges $23 has prices below the market; a company that charges $27 has prices with the market; and a company that charges $33 has prices above the market. Most companies have price with the market and sell their goods and services for average prices established by major producers in the industry. The producers who establish these prices are known as price leaders. The third element of the marketing process - placement - involves getting the product to the customer. This takes place through the channels of distribution. A common channel of distribution is:

Manufacturer - Wholesaler - Retailer - Customer.

Wholesalers generally sell large quantities of a product to retailers, and retailers usually sell smaller quantities to customers. Finally, communication about the product takes place between buyer and seller. This communication between buyer and seller is known as promotion. There are two major ways promotion occurs: through personal selling, as in a department store; and through advertising, as in a newspaper and magazine. The four elements of marketing - product, price, placement and promotion-work together to develop a successful marketing operation that satisfies customers and achieves the company's objectives.

Practical Assignments:

1. Answer the following questions.

  1. What is marketing? Write down your own definition. 
  2. How does the definition of marketing given in the text differ from the one you wrote? 
  3. What are the four main elements of marketing? 
  4. What is involved in the product element of marketing? 
  5. What are the three pricing options a company may take? 
  6. Using $75 as an average price for a pocket calculator, what would be examples of pricing above, with, and below the market? 
  7. What does placement involve? 
  8. What other advertising media are there besides magazines and newspapers? 
  9. If you were to specialize in one of the marketing elements, which one would you choose - product, price, placement or promotion? Why?

2. Various problems that might occur in the marketing process are listed below. Determine to which of the four P's each problem is closely related: product, price, placement, promotion.

  1. The advertising gives false information (promotion). 
  2. The product is dangerous. 
  3. The product is not available in enough stores. 
  4. The product is too expensive. 
  5. A salesclerk is rude to customers. 
  6. The product is sold during the wrong season. 
  7. The product is of poor quality. 
  8. The advertising is offensive. 
  9. The price of a product increases faster than the rate of inflation. 
  10. The product is not available in your favourite stores.

3. Write a letter to a company in order to complain about an aspect of its marketing process. 

What is Marketing Strategies?

Marketing Mix and Target Market:

The marketing strategies of determining product, price, placement, and promotion are not planned in isolation. Marketing analysts often look at a combination of these four factors. This combination of the four P's is known as the marketing mix. The elements of the marketing mix focus on the consumer. In order to develop a successful marketing mix, researchers first ask two important questions: Who is going to buy the product? What is the potential to sell this product?

The group of customers or consumers who will probably buy the product is known as the target market. The company directs its marketing efforts toward this group of potential customers who form the target market. Once market researchers have determined the target market they wish to appeal to, the company can develop an appropriate mix of product, price, placement, and promotion. The company attempts to match consumer needs or mold consumer desires to the product being offered. For example, if the target market is "middle-class teenagers", the marketing mix might

Consist of the following: 
Product: blue jeans
Price: with the market Placement: department store
Promotion: advertisements on a "pop music" radio station 

A successful marketing mix depends on the knowledge about consumers and their buying habits gained through market research as well as correct identification of the target market. Strategies of product, price, placement, and promotion are blended in order to reach a chosen group of consumers.

Practical Assignments:

1. Discuss the following questions with a partner.

  1. Which type of promotion appeals to you most - radio, television, magazine, or newspaper advertising? 
  2. How are the buying habits of consumers influenced by promotion? 
  3. What do you think the target market would be for a Rolls-Royce? For microwave ovens? For tennis shoes? 
  4. What are some of the factors that the market price of a product depends on?

2. In the exercise below, determine the marketing mix that you think would be successful for this particular group of consumers (target market). Then fill in the price, placement, and promotion you think would be most effective for the target market that is indicated.

Target market: teenagers
Product: tennis shoes
Price: .......................
Placement: ..................
Promotion: ..................

Target market: small restaurants Product: microwave ovens
Price: ..................
Placement: Promotion: ..................

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