Market types – Definition, what it is and concept

The types of market They refer to the different ways in which markets can be classified according to different variables.

Above all, to make any classification of the market, the first thing we must clarify is that a market, in general, is related to a set of buyers that form the demand of a good or service and a set of sellers that constitute the offer of a particular good or service.

Therefore, to make any classification of market types, we must consider the consumers or buyers of a product, to the suppliers or sellers of a product and the product that is the subject of exchange.

Variables used to classify markets

Among some of the variables that are used to classify markets, we can mention the different types of:

Market types based on the product

Attending to a product that is bought and sold, the markets can be of the following types:

  • Consumer Products Market
    On the one hand, the consumer products market represents the market where products aimed at satisfying a need are marketed of consumption, this implies that they are products are used to cover a need, but after the need is resolved the product disappears.

    We can give an example of a piece of pizza that is used to solve the need for hunger, but when the need is met, the product disappears completely.

  • Market for use products
    On the contrary, in the market for use products they exchange products that are used to cover a need, but after covering it well does not extinguish, but remains.

    However, these products can be durable as the case of a computer or non-durable use as the case a pen.

  • Market of industrial products
    Of course, the industrial products market includes all products used as input or raw material in order to produce other goods or services. This may be the case of a product such as steel that can be used to produce aeroplanes or cars.
  • Service market
    In effect, this market includes the marketing of products called services, in which the consumer cannot acquire ownership of the good, either because he only buys the provision of the service; for example, if you use to communicate a public telephone. The case can also be given because an intangible service is received as in the case of educational services.

    Market types based on buyers

    According to characteristics of buyers markets can be classified into:

    • Distributor Market
      On the other hand, this market includes all companies that buy products not to consume them, but to resell them to a higher price than they bought it and thus obtain profits.

      We can put as an example any supermarket that buys products from companies industrial to resell to final consumers.

    • Market of industrial buyers
      In the same way, the industrial buyers market is formed by all the Business They buy productive resources to carry out their production process. It can be a company that buys leather to produce shoes, bags, belts, among others.
    • Government buyer market
      Instead, the government buyer market encompasses all government institutions that buy goods and services to provide public services such as health, or that will be used for public investment as the asphalt that is used in the road infrastructure.
    • Consumer market
      Finally, the consumer market represents all buyers looking to acquire the goods and services that are sold in the market to be used to meet a need, so they are Call consumers because they are the ones who use and consume the products.

      It can be a person who buys a bottle of pure water to satisfy thirst.

      Market types based on competition

      Based on the type of competition faced by producers or suppliers of
      Products, markets can be divided into:

      • Market of perfect competition
        Either way, this type of market is characterized because there is an infinite number of competitors so none It has the power to set prices within the market and practically all products are the same, for that reason perfect competition only exists in a theoretical but not practical way.
      • Market of imperfect competition
        While the imperfect competition market refers to different situations that we find in which some are approximate perfect competition and others a total absence of competition. In other words, imperfect competition is any situation that It is between perfect competition and pure monopoly.
      • Pure monopoly market
        For its part, it is called pure monopoly market when strictly a single company offers the goods and services that are they sell in a market, therefore, that company has full control over the price and quality conditions of these products.

        In general we can say that more the competition in the market more fragmentation is there and the less competition in the market is more concentrated.

        Market types based on the geographic area covered

        In accordance with the geographical demarcation it serves, the market can be:

        • Local market
          Above all, a local market is the one that serves an area reduced market such as a province or a city, a pharmacy that is located in a neighbourhood or in a shopping centre of a city could serve as an example of this type of market.
        • National market
          Of course, the national market is characterized because it covers and covers an entire country, it extends to all cities, departments, provinces or municipalities that make up a country. For example, we could mention a supermarket chain that serves consumers of a whole nation.
        • Regional market
          Consequently, when it comes to the regional market, the area it serves is not limited to certain political limits; in this case We can talk about a market that covers the northern or southern region of a country. But also a group of countries like the Central American region, that is the region the market served can be reduced or wide.
        • International market
          Now, an international market is the one that is formed by a set of buyers that can be from different countries, these they are generally markets served by multinational companies or transnationals
        • Global market
          So, the global market refers to a market which extends to all countries of the world, therefore, goods and services are produced or only marketed in any country in the world. You can say that the global market is the widest and the most extensive that exists.

          Finally we can conclude by saying that the ways of classifying market types are very diverse, but what we cannot forget is that the most used variables have to do with the elements that make up a market; such as the type of buyer, the type of producer or competitor, the type of product that is exchanged and finally geographical area it serves.