Concept of Market Class 9
Marketing
Done in Class 7, Check notes, link given at the end.
Exchange
Done in Class 7, link given at the end.
Market Structure
Market structure consists of two loops: the inner loop is an exchange of money for goods and the outer loop is an exchange of information about the product to the industry with the feedback from the buyers.
Markets can be product market like wholesale cloth market, a demographic market like children wear and toys market or a service market like hospitals, schools, tuition centres.
Market segment:
A market segment is that portion of a larger market which individuals, groups or organization share one or more characteristics that causes them to have relatively similar product needs.
Market segment is dividing a market into homogeneous sub-set of customers.
Example ―SOAP Industry which provides different types of soaps to be used for different purposes by different customers like:
(1) Laundry Soap: An expensive detergent to wash
(2) Low-grade toilet Soap
(3) High quality body Soap.
(4) Industrial Soap
Every businessman tries to make money by selling goods or providing a service at the marketplace. Here is a list of few businesses that one can find in a market.
- Grocery Stores
- Clothing Stores
- Jewellery Stores
- Discount Stores
- Drug Stores
- Travel and Tourism etc.
Virtual Market/Online Market:
Class 7, check notes here: Marketing Notes – Class 7
Concept of Market Class 9
Competition
All producers and service providers are in constant effort to capture the share of market. They are all part of competition, either they give competition, or they face it.
Competition is the rivalry between companies selling similar products and services with the goal of achieving revenue, profit and market share growth.
When two or more business sells similar items of goods or services they are called competitors.
These days marketing activities are performed under higher competitive situations and change according to the changes in consumer ‘s attitude and interest.
Competition focuses on serving consumer ‘s needs and wants better than competitors as all the product and service providers try to satisfy their customers.
To survive in strong competition, one needs to use uniqueness in some way or another to capture the market share. It can be in the manufacturing process, design, selling technique or anything other. Whatever it is you need great work ethics, your time and full energy to stay in market.
Types of competition:
- Direct competition
Direct competition is with another company that offers the same products and services aimed at the same target market and customer base, with the same goal of profit making and marketing share growth.
When we refer to term competition, it means a direct competitor.
- Indirect competition
Indirect competition is with the company that offers the same products and service similar to direct competitors, but goals are different. Here, the competitors are in the market to earn revenue with a different strategy.
For this purpose, a different market mix, (product, place, price and promotions) needs to be used through which you are able to satisfy your customers and earn great revenue for your business.
Benefits of competition:
- Encourages creativity as the companies use new ideas.
- Benefits the buyers with large choice and affordable price.
- Promotes performance and innovation with more research and development (R & D).
- Fair trade and open competition in the national and international markets.
- No single firm and company can dictate prices.
Can you avoid competition?
A business has to give competition or face competition. Whenever there are a large number of goods and service providers competition is healthy for the overall development of the economy and the customers.
How to deal with this situation in competition in the market?
Instead of fearing competition and depending on the rumours and misinformation, a business should study the practices of the competitors and prepare its own strategy to run and survive.
It is rightly said, “The competitors to be feared is one who never bothers about you at all but the one making business better all the time”.
The main purpose of business these days is not only to satisfy the customers, but to satisfy them better than that of competitors.
Concept of Market Class 9
Product Market
A product is a set of tangible and intangible attributes that can be offered to someone to satisfy a need or want.
A product market consists of all potential and existing consumers sharing a particular need or wants who might be willing and able to engage in exchange to satisfy their needs or wants. In simple words, product market is where products produced by business houses are sold to households.
These products can be (1) the fast-moving consumer products (FMCG) and (2) durables products.
Key Points of Product Market
Product marketing is a sub field of marketing, which can be split into true areas i.e. product market and service market.
Product market is a dynamic exchange system defined by sellers, products and customers.
The number and diversity of competition increases, as the number of diversity of products/increases and the number and diversity of customers also increase.
In the product market there are direct competitors and indirect competitors.
- Direct competitors are those who use the same technologies to deliver comparable products i.e. a single product market.
- Indirect competitors are those who use different technologies to deliver substitute products.
Geographic markets and types of channels used to reach the customers are also considered in defining a product market.
A product market will have to take into consideration Four P‘s i.e. Product, Price, Place or Promotion.
It is necessary to plan and develop products which meet the specification of the customers.
The success of marketing and sales departments depend upon the nature of the product offered to the customers in the market.
Service market
Services are intangible, irreparable, variable and perishable products. They do not have physical existence. Hence, services cannot be touched tasted or smelt.
According to the American Marking Association - Services are activities, benefits, or satisfactions which are offered for sale or provided in connection with the sale of goods.
Services market includes services such as telecommunication services, health care services, car rental services etc. But they do not take, normally ownership of any physical element involved.
Service marketing is a set of activities for delivering values to customers and managing customer's relationship that benefits the organization and stake holders.
Nature and characteristics of services
- Intangible: Services are intangible and do not have physical existence.
- Variable: Services vary in nature. Each service offering is unique, and their quality and level of satisfaction is also different from person to person.
- Perishable: Services cannot be stored once they have been used like product can be saved, returned or re[1]
- Simultaneous generation and consumption: Services are attached to the service provider as services are generated and consumed by a customer simultaneously.
- Users: The users of services are called client. Users of services may be an individual or an institution or a group.
- Payment: Services rendered are paid in the form of fee, charge, rent, commissions, premium or salary, depending on its nature. Payment depends on the qualities of service and the staff involved.
Alternative View: Services are (usually) intangible economic activities offered by one party to another.
Concept of Market Class 9
Marketing mix for services:
In Product Market, Marketing Mix has main 4 elements i.e. 4Ps which are Product, Price, Place and Promotion.
In Services Market, Marketing Mix has 7Ps i.e. three more Ps are added to these 4 Ps – People,
Process, and Physical environment.
People: Customers always look for efficiency in service that will come from staff of the service provider. So, the staff should be well trained, efficient and committed for their job.
Process: Process here means the process to carry out order and its delivery to the customer should be efficient.
Physical environment: In many cases customers will be very much concerned about the hygienic standard, ambience and service provided to them.
Types of Service
- Core Services: A service that is the primary purpose of the transaction like a haircut or the services of lawyer or teacher.
- Supplementary Services: Services that are rendered as a corollary to the sale of a tangible product like home delivery options offered by restaurants above a minimum bill value.
Difference between Goods and Services
Goods and Services can be easily distinguished on the basis of:
- Physical commodity/process or activity
- Tangible /Intangible
- Homogenous /Heterogeneous
- Separate production and consumption/ Simultaneous production and consumption
- Can be stored /Cannot be stored
- Transfer of ownership is possible/not possible