- The word market comes from Latin word ‘marcatus’

which means merchandise or trade or place where business

is conducted.
- A market may means a place where buying and selling
of commodities are taken place.
- It is a place of compitation for organizing and
facilitating business activities.
 a} Merchandise means the pursuit of action taken to
buy or sell the commodity.
b} Trade means an art of buying and selling.
c} Place means where goods and services are purchased
and sold.
- It may be area or point whose buyer and seller meet
with intention of buying and selling.
 Definitions
Clark and Clark defined market as “ a centre about which or an

area in which the forces leading to exchange or title to a particular

product operate and towards which the actual goods tend to travel”.
 According to Cournot, a French economist, “The term market

means not a particular market place in which things are bought and
sold but the whole of any region in which buyers and sellers are in
such a free intercourse with one another that the prices of the same
goods tends to equality, easily and quickly.
According to Chapman, “the term market refers not to a

place but commodity or commodities and buyers and

sellers who are in direct competition with one another”.
“ A market is the area within which the forces of demand

and supply converge to establish a single price”.

 Components of a Market
1} Place : It is demarcation of area related to the region,
country or the whole world.
2} Buyer and Seller : There must be the existence of buyer
and seller.
3} Commodity : There is existence of a good or commodity
for transaction.
4} Intercourse : It is the business relationship between
buyers and sellers.
Dimensional Classification of
Markets
 A] On the basis of Location of
operation :
1} Village Markets:
- Located in a small village
- Transactions take place
among the buyer and seller
of a village is known as a
village market.
2} Primary Markets:
- Located in town (near the
center of production of
agricultural commodities)
- Transactions taken place
between the farmer and
primary trader in this
market.
3} Secondary
4} Terminal Markets :
Wholesale Markets :
- Located at district - Located at metropolitan
headquarter or near city or at sea port like Delhi,

railway station Mumbai, Chennai or

Kolkata.
- Transaction is done
- A terminal market is one
between village trader and
where the produce is either
wholesaler.
finally disposed of the
consumer or processor or
for export.
5} Sea-board Markets :

- Located at near the seashore

and are meant mainly for the
import and/ or export of goods
are known as seaboard
markets.

- Examples of these markets in

India are Bombay, Madras,
Calcutta.
 B] On the basis of Area or
Coverage :
1} Local/ Village markets : 2} Regional markets :
Buyers and sellers from the Buyers and sellers come

nearby village for buying from a large area for

and selling activities commodity exchange
This market exist mostly for It exist specially for

perishable commodities in foodgrain in India.

small lots (i.e. vegetable or
milk market
3} National Markets : 4} World/International Market :

Buyers and sellers are at the Buyers and sellers are

national level. drawn from the whole world.

 National markets are found This market exists in the

for durable goods like jute commodities, which have a

and tea. world-wide demand and

supply. (for ex. Gold, silver,
raw cotton, sugar, rice and
wheat)
C] On the basis of Time Span :
1} Short period markets :
The market which is held
only for a day or few hours
is called short period
market.
It is for perishable produce
like fish, fresh vegetable and
liquid milk.
2} Periodic markets :
This market is held on
specific days and time at
specified place either in
village, town or urban area
It is generally held weakly or
monthly according to the
traditions.
3} Long period markets : 4} Secular markets :

The market is held for a The market is permanent in

longer period nature

It is for less perishable It is for durable

commodities. (ex. commodities, which can be

Foodgrains and oilseeds) stored for many years . (ex.

Machinery)
D] On the basis of Volume of transaction
:
1} Wholesale markets: 2} Retail markets :
The commodities are bought and  Commodities are bought by and

sold in large quantities sold to the consumers as per their

requirement
It is located in town or city
 It is located very near to
Transactions in these markets take
consumer
place mainly between traders.  Transaction is taken place
between retailer and consumer
 The retailers purchase in wholesale

market and sell in small lots to the

consumer.
 E] On the basis of Nature of
transactions :
1} Spot/ Cash markets: 2} Forward Markets :
Commodities are exchanged In this market buying and

for money immediately selling of commodity is taken

after the sale is called spot place in present time ‘t’ but
or cash market. actual exchange of the
commodity is taken place in
future that is time ‘t+1’.
 F] On the basis of Number of
commodities :
1} General Markets: 2} Specialized Markets :

In this market the In this market the

commodities like foodgrains, transactions are taken place

oilseeds, pulses and fiber with respect to one or two
crops are bought and sold is commodities is known as
called general market. specialized market .

It is deals in a large It may be either foodgrain,

numbers of commodities. vegetable or cotton market.

1} Perfect Markets:
- There is a Large number of buyers
- There is a Large number of sellers
- All the buyers and sellers have Perfect Knowledge of
demand, supply and prices
- Prices are uniform
- Homogeneous product
- Free entry or exist of firms.
2} Imperfect Markets:
a) Monopoly Market: b) Duopoly Market:
- When there is only One seller - Two sellers of a commodity is
of a commodity is termed as a termed as a duopoly market.
monopoly market.
* When there is only Two
- Sole control over the quantity
buyers of a commodity, the
or price of the commodity.
market is known as duopsony
* When there is only One buyer
market.
of a product, the market is
termed as a monopsony
market.
c) Oligopoly Market:
- More than two but still a few
sellers of a commodity is
termed as an oligopoly
market.
* A market having a few (more
than two) buyers, is known as
oligopsony market
d) Monopolistic Competition:
- Large number of sellers
deals in heterogeneous and
differential form of a
commodity, the situation is
called monopolistic
competition.
 H] On the basis of Nature of
commodities :
1} Commodity Markets : 2} Capital Markets :
Deals with goods like The market in which bonds,

wheat, cotton and so on shares and securities are

is termed as commodity bought and sold, is called

market. capital market.

Ex. Money market and

Share market.
 I] On the basis of Stage of
marketing :
1} Producing Markets : 2} Consuming Markets :

It is located in producing It is located in where

area. production is inadequate or in

In this market, is assembled urban area.

Market which collect the
for further distribution to
produce for final disposal to
other markets are termed as
the consuming population
producing markets.
are called consumer markets.
 J] On the basis of Extent of public
intervention :
1} Regulated Markets : 2} Unregulated Markets :
In this market business is In this market business is
done in accordance with the conducted without any set
rules and regulations. rules and regulations.
The marketing costs are
The market suffers from
standardized and
many ills.
marketing practices are
regulated.
 K] On the basis of Types of
population served :
1} Urban Market : 2} Rural Market :
A market which serves in In this market, the demand

urban area is called an is from the rural population

urban market. to the products.
Demand for farm products

is from urban population.

 L] On the basis of Accural of
marketing margin :
1} Farmer’s Markets : 2} Co-operative Markets :
In this case, farmer himself In this case, producers

can take marketing activities cooperative can handle

marketing of various products.
for his product.
Ex. Farmers sugar factory,
Ex. Farmer can sell milk
the marketing margin is
directly to consumer and get
shared among the members.
marketing margin.
3} General Markets :
It is the market in which a large member of

commodities are transacted and the marketing

margins are negligible.