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MARKET AND MARKET ORIENTATION





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A marketfor a product is the people or organizations who buy it or may buy it, or an area where it is sold. There exist different types of markets: street markets, shops and supermarkets, markets for services, financial markets, commodity markets.

A company's or product's target marketis a group of consumers a company aims to sell its products to, for example children, housewives, fishermen, etc.

The market leaderis the company or product with the biggest share.

A firm usually focuses its attention on a market segment. Market segment is the part of a market consisting of consumers with similar characteristics. Waysin which a market might be segmented include age, income, lifestyle, geographical location.

A market niche is a small, specific segment of the market, often dominated by small firms selling some kind of goods.

Marketers often talk about market orientation: the fact that everything they do is designed to meet the needs of the market.

Companies quick to respond to the needs of a market are market-driven, market-led or market-oriented.

To make decisions about products companies do a market research which is the collection of information on markets, products and consumers; on what people need, want, and buy; how and when they buy and why they buy one thing rather than another.

 

TYPES OF COMPETITION

Four basic degrees of competition exist in a private enterprise system: pure competition, monopolistic competition, oligopoly, and monopoly.

Pure Competition

Pure competition involves similar products that cannot be differentiated from those of competitors. In a purely competitive market, it is relatively easy for a firm to enter or leave that market. Agriculture is probably the closest example ofpure competition and wheat is an example of a product that is similar from farm to farm.

Monopolistic competition is a market situation where firms are able to differentiate their product from those of competitors. You can see monopolistic competition operating when you watch commercials that try to persuade you to choose one brand over another. Monopolistic competition gives a firm some power over the price it charges. Think about retail stores, where prices can vary among different brands of aspirin, toothpaste, or gasoline.

Oligopoly is a market in which there are few sellers. In some oligopolies such as steel, the products are similar; in others, such as automobiles, they are different.

The primary difference between oligopoly and the previously mentioned types of competition is that the limited number of sellers gives the oligopolist more control over price. In an oligopoly, the prices of competitive products are usually quite similar because substantial price competition would lessen every firm's profits.

Monopoly is a market situation in which there are no competitors.

 

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