Types of markets and their marketing approach #business_administration #MBA #marketing #aagsb

Markets Traditionally, a “market” was a physical place where buyers and sellers gathered to buy and sell
goods. Economists describe a market as a collection of buyers and sellers who transact over a particular product or
product class (such as the housing market or the grain market).
Five basic markets and their connecting flows are shown in Figure 1.1. Manufacturers go to resource markets
(raw material markets, labor markets, money markets), buy resources and turn them into goods and services, and
sell finished products to intermediaries, who sell them to consumers. Consumers sell their labor and receive money
with which they pay for goods and services. The government collects tax revenues to buy goods from resource, manufacturer, and intermediary markets and uses these goods and services to provide public services. Each nation’s
economy, and the global economy, consists of interacting sets of markets linked through exchange processes.
Marketers view sellers as the industry and use the term market to describe customer groups. They talk about
need markets (the diet-seeking market), product markets (the shoe market), demographic
markets (the “millennium”
youth market), geographic markets (the Chinese market), or voter markets, labor markets, and donor markets.
Figure 1.2 shows how sellers and buyers are connected by four flows. Sellers send goods and services and communications
such as ads and direct mail to the market; in return they receive money and information such as customer
attitudes and sales data. The inner loop shows an exchange
of money for goods and services; the outer loop
shows an exchange of information.
Key Customer Markets Consider the following key customer markets: consumer, business, global, and
nonprofit.
Consumer Markets Companies selling mass consumer goods and services such as juices, cosmetics, athletic
shoes, and air travel establish a strong brand image by developing a superior product or service, ensuring its
availability, and backing it with engaging communications and reliable performance.
Business Markets Companies selling business goods and services often face well-informed professional buyers
skilled at evaluating competitive offerings. Advertising and Web sites can play a role, but the sales force, the price,
and the seller’s reputation may play a greater one.
Global Markets Companies in the global marketplace navigate cultural, language, legal, and political differences
while deciding which countries to enter, how to enter each (as exporter, licenser, joint venture partner, contract
manufacturer, or solo manufacturer), how to adapt product and service features to each country, how to set prices,
and how to communicate in different cultures.
Nonprofit and Governmental Markets Companies selling to nonprofit organizations with limited purchasing
power such as churches, universities, charitable organizations, and government agencies need to price carefully.
Much government purchasing requires bids; buyers often focus on practical solutions and favor the lowest bid,
other things equal.16