Good morning everyone. Today we are going to talk about markets, one of the most important topics in Business Studies.
So, what exactly is a market? In simple terms, a market is a place where buyers and sellers come together to exchange goods or services. It does not have to be a physical place like a shop or market stall. It can also be online, such as websites or apps where transactions take place. Understanding the nature of different markets helps businesses develop effective strategies and stay competitive.
Let us start with the different types of markets. The first distinction is between consumer markets and industrial markets. Consumer markets involve the sale of goods and services to individuals for their own personal use. For example, when you buy clothes from Zara, a phone from Samsung, or groceries from Carrefour, you are part of a consumer market. Industrial markets, on the other hand, involve businesses selling to other businesses. For instance, a company that makes car tyres sells them to Toyota, or a software company sells accounting software to a bank. These products are usually more technical and sold in smaller quantities, but they are worth more money.
Now, let us talk about the size or scope of markets. There are local, national, and international markets. A local market is limited to a small area, like a bakery serving people in one town. A national market operates across the whole country. For example, Tesco in the United Kingdom or Khaadi in Pakistan sell products all over the country. International markets are global, meaning businesses sell in more than one country. Coca-Cola is a great example. It sells in more than two hundred countries and even adjusts its flavours to suit local tastes.
Next, we need to understand the difference between product orientation and market orientation. A product-oriented business focuses mainly on what it can make well, rather than what customers actually want. For example, Intel focuses on developing powerful computer chips, assuming customers will want the latest technology. The problem with this approach is that the company might make a great product that no one really needs. On the other hand, a market-oriented business focuses on what customers want and makes products to meet those needs. McDonald’s is a good example. It introduced healthier food options because customers wanted lighter meals. This approach leads to higher customer satisfaction and a better chance of success. Most modern businesses try to combine both approaches so they can make high-quality products that customers truly want.
Now let us look at how businesses measure their success in the market. Two important measures are market share and market growth. Market share tells us how much of the total market a company controls. For example, if Samsung sells two hundred thousand phones in a market where one million are sold in total, its market share is twenty percent. A growing market share usually means a business is doing well and customers like the brand.
Market growth, on the other hand, shows how much the whole market is expanding. For example, if total smartphone sales increase from one million to one point two million, that is a twenty percent market growth. High market growth means more opportunities for profit, but it also attracts more competitors.
Let us consider what happens when market share or market growth changes. If a company’s market share increases, it shows strong performance and brand loyalty. However, it can also attract new competitors. If market share decreases, it may mean the company is not meeting customer needs or facing strong competition. A good example is Nokia, which lost its market share because it failed to keep up with smartphone technology. If market growth is high, like in the electric vehicle industry, more companies will enter and innovate. If growth is slow, firms may focus on saving costs or finding new ways to attract customers.
By the end of today’s lesson, you should be able to explain what a market is, identify different types of markets, understand product and market orientation, calculate and interpret market share and market growth, and explain what these changes mean for a business.
