Classification Of Markets

CLASSIFICATION OF MARKETS:

Markets can be classified in several ways from different approaches:


1.On Geographic or Area Basis: From the stand point of geographical area, market are divided into: (a) Local Markets, (b) National Market, (c) International Market.


a) Local Market: These markets relate to a particular locality. In the case of these markets, commodities are sold within geographical limits. Such commodities are difficult to be sold outside local limits. Generally, commodities which are heavy and perishable have local markets. For example bricks, vegetables, fruits, milk etc have local markets.


b) National Market: The growth of industries has widened the scope of market on national level. With the growth of transportation and communication, most of the goods are marketed at national level.


c) International Market: These are known as foreign markets where goods are sold beyond national boundaries. With the growth of transportation and communication systems, a number of products have acquired an international level.


2.On the Basis of importance: On the basis of importance markets may be divided into: (a) Primary Market, (b) Secondary Market (c) Terminal Markets.


(a) Primary Markets: In primary markets, primary producers of agricultural products or manufactured goods sell to wholesalers, who assemble the goods from different sources of production. Those markets are generally found in villages.


(b) Secondary Markets: In the secondary markets, wholesalers sell the goods to retailers for further selling. Semi-processed and semi-manufactured goods are generally sold and purchased in secondary markets. Ex: Yam market.


(c) Terminal Market: It is the market where final products are sold to final consumers i.e. consumers purchase goods in the terminal markets from the retailers.


3. On The Basis Of Business: On the basis of volume of business, the market may be divided into:
(a) Wholesale Market
(b) Retail Market


(a)Wholesale Market: In wholesale market goods are bought and sold in huge quantities. In these markets sellers are wholesalers and the buyers are retailers. Wholesalers purchase goods in bulk quantities and sell the same to retailers in small quantities.

(b)Retail Market: In this market retailers who purchase goods from wholesalers, sell to ultimate consumers in individual units i.e. very small quantities.


4. On Economic Basis: In economics, markets are classified into: (a) Perfect Market 
(b) Imperfect Market


(a) Perfect Market: In perfect market there will be perfect competition between buyers and sellers who have full knowledge of other buyers and sellers. Due to this only one price will prevail in the market for the commodity. The following are the essentials features of perfect market.

I. Groups of buyers and sellers
II. Effective competition between buyers and sellers
III. One price for the commodity throughout the market


(b) Imperfect Market: Imperfect market is a market which is not a perfect market. In this market we find some kind of maladjustment in demand and supply; buyers and sellers have no knowledge of other buyers and sellers.


5. On Time Basis: On the basis of time markets may be classified into
a. Very short period Markets
b. Short period Markets
c. Long Period Markets

a) Very Short Period Markets: It refers to markets which exist for a very short period normally a day. Such markets generally sell fruits, flowers, vegetables, milk etc.

b) Short Period Markets: These markets include weekly markets held in villagers. Fairs are also included in this category.

c) Long Period Markets: Durable goods are purchased and sold in long periods markets. In these markets goods may be held for a long period without any deterioration in quality.


6. On The Basis Of Nature of Goods: On the basis of the nature of goods that are purchased and sold, markets may be divided into.
a. Commodity Markets
b. Capital Markets:
c. Foreign Exchange Markets:
a) Commodity Markets: These markets deal in different commodities. Consumer goods are purchased by ultimate consumers and industrial goods are purchased by manufacturers.

b) Capital Markets: These include money markets, stock markets etc. In money markets borrowings and lending take place. In stock market shares, debentures, bonds etc are brought and sold.

c) Foreign Exchange Markets: Foreign exchange markets deal in currencies of different foreign countries. These markets arrange foreign currencies to make payments for the imports from other countries. They convert home currency into currencies of foreign countries.