Question

Attempt the following.

Explain various 'Concepts of Market'.

Answer 1

Marketing is a key function of modern management as it helps to provide a competitive edge to the business. It helps a business to gain loyal customers. The meaning of marketing differs depending upon the audience, media platform and business in the changing market.

Definition:

According to Philip Kotler,

“Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others”.

Concept of Market:

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 the place where two or more parties are involved in buying and selling. These two parties involved in the transaction are called buyers and sellers.

There are many concepts associated with the word ‘market’ and according to the concept, different definitions of the term market are given below:

1. Place concept of market:

The term market is commonly understood as a place where buyers, sellers and other intermediaries come together to exchange goods & services for money or money’s worth. Traditionally, place played an important role in defining market. However, in the age of information technology, ‘market’ has a wider meaning than just place.

2. Commodity concept of market:

In this concept, importance is given to the process of ‘buying and selling of goods or services’ and not the place of exchange. In this process not only the buyers and sellers but also the commodity exchanged plays an important role.

3. Exchange concept of market:

This concept gives emphasis on the exchange of goods and services between the buyer and seller done with free consent as well as mutual trust. There should not be any fraud or misinterpretation or coercion (force) or undue influence during the exchange. The exchange should be done voluntarily between the buyer and seller.

4. Area concept of market:

The area concept of the market is related to exchange concept. It gives emphasis on free association between buyers and sellers to fix the price for the exchange of goods and services. The price fixed implies in the certain area only. In this concept, it is not necessary for the buyers and sellers to meet in person. The buyers and sellers can fix the price by taking the help of the different modern communication media and exchange the goods or services.

5. Demand or Customer concept of market:

Customer is the king of the market. One of the important factors of the market to be considered is the need or demand of the customer. 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 market.

6. Space or Digital cocept of maret:

Emergence of information technology has given rise to the new concept of market called space or digital concept. The new ecommerce portals and mobile applications (E.g.: Amazon, Flipkart, Myntra, Snapdeal etc.) have made buying & selling easy and convenient for buyers as well as sellers. Further, communication media like telephones, mobiles, computers, internet etc. has enabled direct contact between the buyer and seller. The customers can know about the quality, features, price, terms and conditions etc. of any products of any company easily. Digital market can be defined as “market which uses information technology for buying and selling of the products or services and facilitate communication of quality, features, price and terms of exchange among them.”