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What is a market? Classification & Core elements of (a) market

In this post, we will explore what is a market and how to identify the type.  We'll also look at some of the core elements that make up a market as well as some popular types of markets.  So let's get started!

What is a market? Definition & Classification

Definitions of market

What is a market?

Common definition

In most cases (including economic), market is a place where commercial dealings are conducted among buyers and sellers who are peoples and organizations. The word "market" can refer to a wet market, supermarket, stock exchange...

What is market? - Definition of market

Definition of market in marketing

In marketing, a market is a collection of customers, who have needs which can be satisfied by a product/service.

For example: Global smartphone market, US real-estate market, Asian fast-food market..

What is market in marketing? - Definition of market in marketing

Classification of market

How many types of market are there?

Markets can be classified into many types based on a certain criteria:

  • Monopoly market & monopsony (competitive) market (based on economics models)
  • Agricultural market, industrial market, commercial market... (economic areas)
  • Food market, clothing market, footwear market, automotive (car) market, stock market... (product types)
  • Consumer market & business market (individual buyers & organizational buyers).
  • Black market & legal market (legality)
  • Offline market & online market (mediums)
  • Retail market & wholesale market (methods of distribution)

Now we have a closer look at some popular types of market

What is a monopoly market?

A monopoly market is a market in which there is only one individual/organizational seller providing a certain kind of products/services to many buyers. In such a condition, the seller has a monopoly with no competition from others and has complete control over the products and services.

What is a monopsony (competitive) market?

A monopsony (competitive) market is a market in which there are many sellers providing a certain kind of products/services to many buyers. In such conditions, a seller has to compete with others in order to make a sale.

What is an offline market?

An offline market is a market in which buyers have to go to a physical place (store, supermarket, shop, vendor...) in order to make a purchase.

What is an online market?

An online market is a market in which buyers have to contact sellers by Internet (Website, Social Media, Mobile Applications...) to make a purchase.

What is a retail market?

A retail market is a market in which sellers are also retailers who provide a low volume of goods or services to each customer.

What is a wholesale market?

A retail market is a market in which sellers are also wholesalers who provide a high volume of goods or services to each customer.

Core elements of a market

What are core elements of a market?

A market can have basic elements as below:

  • Buyers (required): Customers (individuals or organizations) who buy a product/service from sellers.
  • Sellers (required): Individuals or organizations who sell goods/services for money in return.
  • Exchange items (required): Products (goods), services and money
  • Regulators (required in legal markets): Governments, national organizations, international organizations are the ones who regulate and control legal markets by rules, legislations, taxes, quotas...

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