Unit-4 Market Analysis POE | BBA First Year

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 Definition Market Analysis: Nature of the Market

• When we talk about a market we generally imagine a crowded place with lots of consumers and a few shops. People are buying various goods like grocery, clothes, electronics etc.
• And shops are also selling different types of products and services. So in the traditional sense, a market is where buyers and sellers meet to exchange goods and services.
• In economics, we do not refer to the market as a physical location. Economists would describe a market as the coming together of buyers and sellers, i.e. an arrangement where buyers and sellers come into direct or indirect contact to sell/buy goods and services.
• For example, the mobile market would constitute all the sellers and buyers of mobile phones in an economy. It does not necessarily refer to any geographical location.
• In economics, the term market would refer to the market for a commodity or a group of commodities. For example, coffee market, rice market, TV market etc.
• A market is also not limited to a physical or geographical location. It covers the demand and supply forces of a general wide area and region.
• To form a market there must be a group of buyers and sellers of a commodity. And the relationship between these sellers and buyers should be a business relationship.
• There Both sellers and buyers must have knowledge about the market. There should be awareness about the demand for products, consumer preferences and preferences, fashion trends, etc.
• There can be only one price prevailing for goods and services in the market at any time. This is possible only in the existence of perfect competition.

CLASSIFICATION OF MARKETS

• Now we have seen what a market is. Let us learn more about the classification of markets. Broadly there are two classifications of markets – product markets and factor markets. Factor market refers to the market for purchase and sale of factors of production such as land, capital, labor etc. Other classification of markets are as follows,
  

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Based On Geographical Location

• Local Market: In such a market, buyers and sellers are limited to the local area or region. They generally sell perishable goods of daily use as transportation of such goods can be expensive.
• Regional markets: These markets are more extensive than local markets such as a district or a group of small states
• National Market: This occurs when the demand for goods is limited to a specific country. Or the government may not allow trade of such goods outside national borders.
• International Market: When the demand for the product is international and the goods are also traded internationally in quantity, then we have an international market. call it wholesale

One Timely Basis

• Very short-term market: This occurs when the supply of goods is fixed, and hence cannot be changed immediately. For example, say a market of flowers and vegetables. The price of fruits etc. will depend on the demand.
• Short term market: The market is a little longer than the previous one. Here the supply can be adjusted slightly.
• Long-term market: Here supply can be easily changed by increasing production. Therefore it may change as per market demand. Therefore the market will determine its equilibrium price in time.

Depending On The Nature Of The Transaction

• Spot Market: This is where the spot is The transaction takes place, meaning the money is paid immediately. there is no loan arrangement
• Future Market: This is where the transactions are credit transactions. A promise to pay a consideration sometime in the future.

Based On Regulation Some

• Regulated Market: In such market there is proper monitoring by government authorities. This is to ensure that there is no unfair trade practice in the market. Such markets may also refer to a product or group of products. For example, the stock market is a highly regulated market.
• Unregulated Market: It is a completely free market. There is no monitoring or regulation here, market forces decide everything

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