What is Market?
• The word market is derived from the Latin word "Marcatus"
which means place for performing the business activities.
• In narrow view, market is the place where buying and selling for
needs and wants for getting satisfaction is performed. In broad
view market is not only place of buying and selling, it is also a
process of exchange.
• According to American Marketing Association “A market is the
aggregate demand of the potential and existing buyers of a
• In broad sense market is a group of customers with need to
satisfy, money to spend and willingness or desire to spend
money to create exchange relationship. Market is the number of
people who have some need and want, have resources, and are
also willing to participate in a mutually satisfying transaction.
Various concepts of market
i. Place concept:- It is traditional concept of market. According to this concept
market is an easy place where buyers and sellers meet together for the
purpose of buying and selling. Ghorahi Bazar, Narayanpur Bazar, lamahi
Bazar, Kapurkot bazar, Mana tower etc.
ii. Commodity Concept:- According to commodity concept, market is the
activity of selling and buying of commodity or product or services. Sellers and
buyers complete exchange process for their mutual interest.
iii. Demand Concept:- According to demand concept, market is the total or
aggregate demand of all actual and potential customers for a specific product
over a specific period.
iv. Exchange Concept:- Exchange is an act of giving one thing and receiving
another in return. According to exchange concept, market is the exchange
process, in which sellers exchange their products or services with money.
Buyers pay money for product or services.
v. Space concept:- Space concept of market is internet based market. Thus it is
also known as internet market. Customers can select goods and services
searching websites and internet. Digital technology, product or services,
buyers and sellers, direct transaction etc. are the distinct features of space
concept market.7/18/2017 4
Features of market
iii. Buyers and sellers
Types of Market
A. On the basis of geographical area
i. Local Market
ii. Regional Market
iii. National Market
iv. Global Market
B. On the basis of business volume
i. Wholesale market
ii. Retail market
C. On the basis of competition
i. Monopoly market
ii. Perfect competition
iii. Imperfect competition
D. On the basis of control
i. Regulated market
ii. Unregulated market
E. On the basis of delivery
i. Spot market
ii. Future market
F. On the basis of Nature of products
i. Commodity market
ii. Service market
iii. Money market
iv. Foreign exchange Market
v. Labor market
vi. Security market
• Companies today recognize that they cannot appeal to all
buyers in the marketplace, or at least not to all buyers in the
• Buyers are too numerous, too widely scattered, and too varied
in their needs and buying practices.
• Moreover, the companies themselves vary widely in their
abilities to serve different segments of the market. Rather than
trying to compete in an entire market, sometimes against
superior competitors, each company must identify the parts of
the market that it can serve best and most profitably.
• Thus , most companies are being more choosy about the
customer with whom they want built relationships. Most have
moved away form mass marketing and toward market
segmentation and targeting.
• Instead of scattering their marketing efforts (the short gun
approach), firms are focusing on the buyers who have greater
interest in the values they create best (the rifle approach)
• Companies have not always practiced market segmentation and
targeting from very beginning.
• Most of the time in 19th and 20th century, most of the marketing
organizations such as ford motors, Coca-Cola etc. practiced mass
marketing- mass production, mass distribution, and mass promoting
about the same product in about same way to all consumers.
• These companies argued that mass marketing creates the largest
potential market which leads to the lowest costs due to economics of
• But however, many factors now make mass marketing more difficult.
Today marketers find it very hard to create a single product or
program that appeals or satisfies to all of diverse people in market.
• As well as, customers are bombarded with message, information etc.
in medias like TV, radio, magazines, newspapers, telephone etc.
• So no surprisingly, many companies are retreating form mass
marketing and tuning segmented marketing.
Markets consists of buyers, buyers differ
in one or more ways, they may differ in
their wants, income level, location,
buying attitudes, buying practices,
Through market segmentation,
companies divide large heterogeneous
markets into smaller homogeneous segments that can be
reached more efficiently and effectively with products and
services that match their unique needs.
It may be defined as a process of splitting or dividing potential
customers into certain groups or segments sharing similar levels of
needs. It is Dividing a market into distinct group of buyer with
different needs, characteristics or behavior who might require
separate product or marketing mix.
It is creating sub-sets of a market based on similar characteristics of
consumers with similar demands and providing them with a product
to satisfy their need in a much better way than it could have been
In conclusion, market segmentation is the process of dividing
total market into several small parts on the basis of customers
need, wants, buying purpose, buying habit, age, education,
gender, religion, income, place etc.
Market segmentation is made in a way that, generally, the
characteristics of the entire customer within a segment are
It is customer oriented mission in which total market is
divided into several parts of same characteristics by
identifying customers' needs or wants to supply them with
• Above figure shows three major steps in target
marketing. The first is market segmentation- dividing
a market into smaller groups of buyers with distinct
needs, characteristics, or behaviors who might require
separate products or marketing mixes.
• Second step is target marketing- evaluation each
market segments' attractiveness and selecting on or
more of the segments to serve on.
• The last on is market positioning- setting the
competitive positioning for the product and creating a
detailed marketing mix.
Identify bases for
Develop measure of
Select target segments.
Develop positioning for
Develop a marketing mix
for each segment
Objectives Of market segmentation
• Market segmentation divides a big heterogeneous
market. It helps to collect a detailed information of
every set of customer.
• Firm can do the comparative analysis of market
segment and decides which segment is more profitable
• Firm can leave unprofitable market segment. So
market segment helps to marketing manager to
identify the possible market opportunities.
1. Identification of market opportunities
Objectives Of market segmentation
• Targeting the market provides details of the customers and
their needs. It helps marketers in production.
• To serve profitable market segment firms should utilize
resource properly. If market is segmented, marketers can
produce the product according to the desire of consumers.
• So the product will meet the demand of the consumers and
there will not be the waste of resource.
2. Optimum utilization of resources
Objectives Of market segmentation
• The objective of market segmentation is to reduce
negative effect of such competition.
• Firm can easily evaluate the market strategies of
competitors if it is segmented.
• Marketers can make better marketing strategies than
competitors in segmented market.
3. Evaluation of competitors
Bases for Segmentation in Consumer
There is no single way to segment a market.
Marketers has try different segmentation
variables, alone and in combination, to find the
best way to view market structure
Some of the segmentation variable are:
1. Geographic Segmentation
Geographic segmentation calls for dividing the market
into different geographical units. A company may
decide to operate in one or few geographical areas, or
operate in all areas but pay attention to geographical
differences in needs and wants.
The following are some examples of geographic
variables often used in segmentation.
• Region: by continent, country, state, or even neighborhood
• Size of metropolitan area: segmented according to size of
• Population density: often classified as urban, suburban,
• Climate: according to weather patterns common to certain
2. Demographic Segmentation
• It divides the market in to groups based on variables
such as age, gender, family size and lifecycle, income,
occupation, education religion race generation and
• Demographic segmentation is mots popular base for
segmenting customer market groups. Because-
Consumer needs, wants and usage rates often vary closely
with demographic variables.
Demographic variables are easier to measure then most
other types of variables.
Even when marketers first define segments using other
bases, such as benefits sought or behavior, they must know
segment demographic characteristics in order to assess the
size of the target market and to reach it efficiently.
2. Demographic Segmentation
Some demographic segmentation variables include:
• Family size
• Family lifecycle
• Generation: baby-boomers, Generation X, etc.
• Social class
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