Chapter 4 Classification and Types of Market

By- Prof. Suraj Bansode

Introduction
What is a Market?
When we talk about a market we generally visualize a crowded place with a lot of consumers and
a few shops. People are buying various goods like groceries, clothing, electronics, etc.
And the shops are also selling a variety of products and services as well. So in a traditional sense,
a market is where buyers and seller meet to exchange goods and services.
But what is a market in economics? In economics, we do not refer to a market as a physical place.
Economists will describe a market as coming together of the buyers and sellers, i.e. an arrangement
where buyers and sellers come in direct or indirect contact to sell/buy goods and services.

 Classification of Markets
(A) On the Basis of Geographic Location
1 Local Markets: In such a market the buyers and sellers are limited to the local region or area.
They usually sell perishable goods of daily use since the transport of such goods can be expensive.
2 Regional Markets: These markets cover a wider are than local markets like a district, or a cluster
of few smaller states
3 National Market: This is when the demand for the goods is limited to one specific country. Or
the government may not allow the trade of such goods outside national boundaries.
4 International Market: When the demand for the product is international and the goods are also
traded internationally in bulk quantities, we call it an international market.
(B) On the Basis of Time
1 Very Short Period Market: This is when the supply of the goods is fixed, and so it cannot be
changed instantaneously. Say for example the market for flowers, vegetables. Fruits etc. The price
of goods will depend on demand.
2 Short Period Market: The market is slightly longer than the previous one. Here the supply can
be slightly adjusted.
3 Long Period Market: Here the supply can be changed easily by scaling production. So it can
change according to the demand of the market. So the market will determine its equilibrium price
in time.
(C) On the Basis of Nature of Transaction

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1 Spot Market: This is where spot transactions occur, that is the money is paid immediately. There
is no system of credit
2 Future Market: This is where the transactions are credit transactions. There is a promise to pay
the consideration sometime in the future.
(D) On the Basis of Regulation
1 Regulated Market: In such a market there is some oversight by appropriate government
authorities. This is to ensure there are no unfair trade practices in the market. Such markets may
refer to a product or even a group of products. For example, the stock market is a highly regulated
market.
2 Unregulated Market: This is an absolutely free market. There is no oversight or regulation, the
market forces decide everything.

Services Marketing and Its Main Features:

Service marketing is marketing based on relationship and value. It may be used to market a service
or a product. With the increasing prominence of services in the global economy, service marketing
has become a subject that needs to be studied separately. Marketing services is different from
marketing goods because of the unique characteristics of services namely, intangibility,
heterogeneity, perishabil-ity and inseparability.
In most countries, services add more economic value than agriculture, raw materials and
manu-facturing combined. In developed economies, employment is dominated by service jobs and
most new job growth comes from services.
Features of Services:
1. Intangibility:
A physical product is visible and concrete. Services are intangible. The service cannot be touched
or viewed, so it is difficult for clients to tell in advance what they will be get-ting. For example,
banks promote the sale of credit cards by emphasizing the conveniences and advantages derived
from possessing a credit card.
2. Inseparability:
Personal services cannot be separated from the individual. Services are created and consumed
simultaneously. The service is being produced at the same time that the client is receiving it; for
example, during an online search or a legal consultation. Dentist, musicians, dancers, etc. create
and offer services at the same time.
3. Heterogeneity (or variability):
Services involve people, and people are all different. There is a strong possibility that the same
enquiry would be answered slightly differently by different people (or even by the same person at
different times). It is important to minimize the differences in performance (through training,
standard setting and quality assurance). The quality of services offered by firms can never be
standardized.

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4. Perishability:
Services have a high degree of perishability. Unused capacity cannot be stored for future use. If
services are not used today, it is lost forever. For example, spare seats in an aeroplane cannot be
transferred to the next flight. Similarly, empty rooms in five-star hotels and credits not utilized are
examples of services leading to economic losses. As services are activities performed for
simultaneous consumption, they perish unless consumed.
5. Changing demand:
The demand for services has wide fluctuations and may be seasonal. Demand for tourism is
seasonal, other services such as demand for public transport, cricket field and golf courses have
fluctuations in demand.
6. Pricing of services:
Quality of services cannot be standardized. The pricing of services are usu-ally determined on the
basis of demand and competition. For example, room rents in tourist spots fluctuate as per demand
and season and many of the service providers give off-season discounts.
7. Direct channel:
Usually, services are directly provided to the customer. The customer goes directly to the service
provider to get services such as bank, hotel, doctor, and so on. A wider market is reached through
franchising such as McDonald’s and Monginis.

 Recent trends in Marketing :

Green Marketing:
Green marketing is developing and selling environmentally friendly goods or services. It helps
improve credibility, enter a new audience segment, and stand out among competitors as more and
more people become environmentally conscious.
Why is green marketing important?
Our planet is facing a lot of threats such as air and water pollution, food waste, plastic pollution,
and deforestation. Chemicals manufactured by factories can be found anywhere, and that is why
many companies consider producing their goods in a more environmentally friendly manner.
Moreover, the level of ecological awareness among consumers is increasing, and people are eager
to purchase eco-friendly products despite their higher prices.
Green Marketing Ideas
1 Use recycled materials
2 Consider using bulk email service
3 Upgrade your equipment and vehicles
4 Highlight that your company is eco-friendly
5 Invest in social media marketing
6 Support environmental initiatives
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Digital Marketing
high level, digital marketing refers to advertising delivered through digital channels such as search
engines, websites, social media, email, and mobile apps. Using these online media channels, digital
marketing is the method by which companies endorse goods, services, and brands. Consumers
heavily rely on digital means to research products. For example, Think with Google marketing
insights found that 48% of consumers start their inquiries on search engines, while 33% look to
brand websites and 26% search within mobile applications.
While modern day digital marketing is an enormous system of channels to which marketers simply
must onboard their brands, advertising online is much more complex than the channels alone. In
order to achieve the true potential of digital marketing, marketers have to dig deep into today’s
vast and intricate cross-channel world to discover strategies that make an impact through
engagement marketing. Engagement marketing is the method of forming meaningful interactions
with potential and returning customers based on the data you collect over time. By engaging
customers in a digital landscape, you build brand awareness, set yourself as an industry thought
leader, and place your business at the forefront when the customer is ready to buy.

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