Market Classifications and Structures: A Comprehensive Analysis
Market Classifications and Structures
A market refers to an arrangement whereby buyers and sellers come in contact with each other, directly or indirectly, to buy or sell goods.
Multiple Classifications
- On the basis of Area/Region:
- Local
- National
- International
- On the basis of Consumption:
- Consumer
- Industrial
- On the basis of Level of Development:
- Developed
- Developing
- Emerging
- On the basis of Competition:
- Monopoly
- Perfect Market
- Imperfect Market
- Macroeconomic Classification:
- Goods and Services
- Financial
- Labor
Market Types Based on Area/Region
Local Market
The market limited to a certain place within a country is called a local market.
National/Domestic Market
The buying and selling of some products is done throughout the whole nation.
International Market
The market cannot be limited to any geographical border of any country. Goods produced in one country are sold in different countries.
Market Types Based on Consumption
Consumer Market
The market for products that people buy for consumption.
Industrial Market
Generally, raw materials, machines, equipment, and machine parts are dealt with in the industrial market.
Market Types Based on Development
Developed Market
Characterized by multiple indicators (e.g., high GDP per capita income, highly industrialized economy, typically with a large service sector).
Developing Market
The opposite of a developed market.
Emerging Market
A developing market that is quickly moving towards becoming a developed market (high GDP fluctuations). Organizations such as the International Monetary Fund (IMF), the Organization for Economic Cooperation and Development (OECD), and the World Bank track these markets.
Market Types Based on Competition
Monopoly Market
Full control of the producer over the market.
- A single seller or producer in the market (firm and industry are synonymous).
- Unique product: full control of supply, and there is no close substitute.
- The producer determines prices.
- Entry barriers exist.
Perfect Market
- A large number of buyers and sellers.
- Homogeneous products.
- Similar price and type of products.
- Free entry and exit from the market.
- Perfect knowledge of market conditions.
- Perfect mobility of factors of production.
Imperfect Market
- Where perfect competition does not exist.
- The number of buyers and sellers is small.
- No perfect knowledge of market conditions.
- There is no single price in this market.
Macroeconomic Market Classifications
Products Market
Product markets, also termed goods or output markets, exchange the production of final goods and services.
Financial Market
A broad term describing any marketplace where buyers and sellers participate in the trade of assets such as equities, bonds, currencies, and derivatives.
Labor Market
The place where workers and employees interact with each other. In the labor market, employers compete to hire the best, and workers compete for the best, most satisfying job.
International Marketing Orientations
Ethnocentric
The home country is superior, and the needs of the home country are most relevant.
- Headquarters extends its ways of doing business to its foreign affiliates.
- Controls are highly centralized, and the organization and technology implemented in foreign locations will be largely the same as in the home country.
Polycentric
Each country is unique and should therefore be targeted in a different way.
- Recognizes that there are different conditions for production and marketing in different locations and tries to adapt to maximize profits in each location.
- Controls are highly decentralized among affiliates, and communication between headquarters and affiliates is limited.
Regiocentric
The world consists of regions (e.g., Europe, Asia, the Middle East).
- The firm tries to integrate and coordinate its marketing program within regions, but not across them.
Geocentric
The world is getting smaller and smaller.
- The firm may offer global product concepts but with local adaptation (‘Think global, act local’).