Concept of Market
What is a Market?
The term market is derived from the Latin word ‘Mercatus‘, which means ‘to trade’, ‘to trade
merchandise or a place where business is transacted.
In simple words market is a place where two or more parties are involved in buying and selling. These two parties involved in the transactions are called buyers and sellers. The transaction of buying and selling takes place with exchange of money.
- Nature of Principle of Management
- Importance of Principles of Management
- Henri Fayol 14 Principles of Management
- Scientific Principles of Management
- Techniques of Scientific Management
There are many concepts associated with the word ‘market‘ and according to the concept, different definitions of the term market are given below:
6 CONCEPT OF MARKET
1) Place concept of Market
The term market is commonly understood as the place where the transaction of buying and selling of goods and services takes place in exchange for money or money’s worth. It is the place where buyers, sellers, and other intermediaries come together and exchange goods or services.
In the olden days, place played an important role in defining the market. But in the age of information technology, the term ‘market’ has a wider meaning than just a place.
2) Commodity Concept of Market
In the commodity concept of the market, emphasis is given on ‘buying and selling of goods or services’. In this concept, the process of buying and selling of goods or services is important and not the place of exchange.
In this process, buyer and seller as well as the commodity exchanged among them play an important role.
3) Exchange concept of Market
The exchange concept of market has given emphasis on exchange of goods or services between buyer and seller with free consent as well as mutual trust. There should not be any Fraud or Misrepresentation or Coercion or undue influence during the exchange. The exchange should be voluntary between buyer and seller.
4) Area concept of Market
The area concept of the market is related to exchange concept. This concept gives emphasis
on free association between buyers and sellers to fix the price of goods for buying and selling.
The price fixed between buyer and seller implies in a certain area only.
In this concept, it is not necessary for buyers and sellers to meet in person. For fixing the price buyers and sellers can regularly take the help of different modern communication media and exchange goods or services.
5) Demand or Customer concept of Market
The customer is the king of the market. One of the important perspectives of the market is to assess the need or demand of the customer. The market can be studied from the perspective of demand or customer. According to this concept, the aggregate demand by potential buyers for any product is the market.
6) Space or Digital concept of Market
Emergence of Information Technology gave birth to the new concept of the market called as
Space or Digital Concept. New and sophisticated E-Commerce Portals and Mobile Applications make buying and selling easy and convenient for buyers as well as sellers.
The communication media like telephone, mobile, computer, Internet, etc. have made direct contact between customer and seller. It is easy for the customers to know about the quality, features, price, terms, and conditions, etc. of any products of any company.
Digital Market can be defined as a “Market which uses Information Technology for buying and
selling of the products or services and facilitating communication of quality, features, price, and terms of exchange among them”