Here is a term paper on ‘Markets’ for class 7, 8, 9, 10, 11 and 12. Find paragraphs, long and short term papers on ‘Markets’ especially written for school and college students.
Term Paper on Markets
Term Paper # 1. Definition of Market:
Traditionally a market is defined as a physical place where buyers and sellers gathered to buy and sell goods. It is a set of existing and potential buyers for a defined products or services. Market is a collection of buyers and sellers where goods and services are transacted. Such buyers share a particular need or want that can be satisfied through exchange relationships.
The size of market will depend upon the number of people who exhibit the need, have the buying power, and are willing to exchange their resources for what they want. A market is always defined for a product at a given time and also is defined in geographical terms like urban/rural, regional/national/global. Marketers often use the term market to cover various groupings of customers. They view sellers as constituting the industry and buyers as constituting the market.
Marketing can be categorized into five types:
Source:
Marketing Management:
A South Asian Perspective – Kotler, Keller, Koshy, Jha, 13th Edition
i. Manufacturers Markets:
These are the markets where manufacturers buy their raw material from resource markets and then convert these raw materials into goods and services; which are further sold to the intermediary markets.
ii. Intermediary Markets:
These buy finished goods and services from the manufacturer markets and sell them to the consumer markets. Intermediary markets receive money from the consumer market and passes a portion of it to the manufacturer markets.
iii. Consumer Markets:
In consumer markets, the consumer sells his labour and receives money; which it passes to the intermediary markets in exchange of goods and services.
iv. Resource Markets:
Resource markets sell raw material to the manufacturers. In resource markets, the resources are collected from the consumer market.
v. Government Markets:
In government markets, the government receives money in the form of taxes which it uses to buy goods and services from all form of markets. Further the goods and services bought from various sources are used in providing services to public.
Term Paper # 2. Competition in the Market:
To deal with competition, the marketer must:
a. Identify who are their competitors,
b. Analyze and compare these competitors against themselves, and
c. Strategize ways for handling these competitors.
While identifying the competitors, marketers can ask the question to themselves like who else differentiates like them; who has entry and exit barriers like them; who has vertical integration like them; who is as global or as local like them; who has cost structures like them; or who else can satisfy the same customer needs like them.
The techniques used for analyzing the competitors are using strategy groups, understanding the competitor’s objectives, and understanding their strengths and weaknesses.
The company can adopt strategies like expanding the total market, protecting their market share, or increasing their market share.
Types of Competition:
Different types of competition are perfect competition, monopolistic competition, oligopoly competition, and monopoly.
These are discussed as below:
a. Perfect Competition:
Under perfect competition, there are many consumers buying a standardized product from numerous small businesses. Since no seller is big enough or influential enough to affect price, sellers and buyers accept the going price.
b. Monopolistic Competition:
Under monopolistic competition, we have many sellers; however, they do not sell identical product. Instead they sell differentiated products which serve similar purpose. Products can be differentiated in terms of quality, style, convenience, location, and brand name.
c. Oligopoly Competition:
Under oligopolistic competition, each seller supplies a large portion of all the products sold in the marketplace. The number of firms entering the oligopolistic market is low since the cost of starting a business in an oligopolistic industry is usually high.
d. Monopoly:
Under monopoly, there is only one seller in the market.
Term Paper # 3. Key Customer of Markets:
a. Consumer Markets:
Consumer markets are those markets where companies sell mass consumer goods and services such as automobiles, soft drinks, cosmetics, air travel, shoes, equipment’s, etc. These companies spend a great deal of time for establishing a superior brand image. Most of these brand’s strengths depends upon developing a superior product, packaging, timely availability of products or services to the consumers, appropriate communications, and reliable services.
b. Business Markets:
Business markets are those markets wherein companies sell business goods and services. They often face well-trained and well-informed buyers who are skilled at evaluating competitive offerings. These buyers buy goods in order to make a new product or resell a product to others at a profit.
Business marketers need to convince their buyers as to how their products will help these buyers achieve high revenue or low costs. Although advertising plays a role in this type of markets; the much stronger roles are played by the sales force, price, and the company’s reputation for reliability and quality.
c. Global Markets:
Companies selling goods and services in the global market must decide which countries to enter; how to enter; how to adapt their product and service features to each country; how to price their products in different countries; and how to adapt their communications to fit different cultures.
They have to make these decisions in the backdrop of different requirements for buying, negotiating, owning and disposing of property; different culture, language, and legal and political systems; and constant fluctuating values of currencies.
d. Non-Profit and Governmental Markets:
In this type of markets, companies sell their goods to non-profit organizations such as churches, universities, charitable organizations, and government agencies. These companies need to price carefully because the buyers in these markets have limited purchasing power.
Lower selling prices might affect the features and quality of the products or services that the seller is willing to offer to the buyers. Most of the government’s purchases are done through biddings and buyers in this type of markets usually favour the marketers with the lowest bids.
Market Places:
Marketplace is where buyers and sellers meet physically to buy or sell products. It is physical place wherein there is a regular gathering of people for the purchase and sale of provisions, livestock, and other goods. These are the stores which are physically present for the customers to shop for products. Eg. Supermarkets, vegetable markets, fish markets, grain markets, etc.
Market Spaces:
A Market space is an online space that facilitates bi-directional commerce. These are the websites created for the purpose of shopping online. On these websites, not only the sellers can list their goods, but buyers can also list their needs too.
The role of the market space is to match buyers and sellers whose contexts have sufficient similarity. If the product being offered and being requested has a high degree of match; and if the buyer and seller agree on price, location and timing; then a successful match can be made that will end in a transaction. In other words these are digital stores.
Metamarkets:
A cluster of complementary products and services that are closely related in the minds of consumers, but spread across a diverse set of industries are called metamarkets. It can also be defined as a conglomerate of the different products and services that comes as complimentary for any particular product.
Eg. For consumer durables sector various things that are related to each other are the spare parts dealers, transportation companies, finance companies, newspapers, magazines, internet websites, etc. Metamarkets comprises of all these sectors. While purchasing a fridge, a buyer will get involved in many parts of this metamarket. This creates an opportunity for metamediaries to assist buyer in moving seamlessly through these groups, although they are disconnected in physical space.
Term Paper # 4. Concepts of Company Orientation towards Market Place:
The marketing functions or activities are conducted by various companies based on alternative concepts or orientations which are discussed as below:
i. The Production Concept:
This concept believes that production of goods is the most important part of marketing activity and that consumers will favour products that are readily available at reasonable prices. Under this concept, improvement in production and distribution efficiency will be the focus for managements. Managers of production-oriented business concentrate on achieving high production efficiency, low costs, and mass distribution.
These companies do not give much importance to features or services. The production concept is adopted when the demand for the products exceeds the supply; or when the products cost is too high and the management has to bring it down to affordable levels by increasing the production. Marketers also use production concepts when a company wants to expand the market.
ii. The Product Concept:
The product concept believes that consumers will favour products that offer the most in quality, performance, and innovative features. This concept emphasizes on the quality of product and services provided to the customer. Continuous improvements in product and quality are essential for companies that follow this concept. They work relentlessly to bring about innovation which can provide superior quality and services to customer.
Some marketers commit the mistake of getting over-obsessed with their products. They become so much over-confident about their own products that they forget to understand what the customer wants. In this case, the marketers fail to understand that a new or improved product will not necessarily be successful unless it is priced, distributed, advertised, and sold properly.
iii. The Selling Concept/The Sales Concept:
The selling concept believes that business and consumers will not buy enough of the company’s products unless it undertakes pressure selling tactics and heavy promotion efforts. Selling is more important for those products for which the demand is low or has declined over a period of time. Most firms also practice the selling concept when they have over capacity.
This concept is also practiced most aggressively with unsought goods i.e. goods that buyers normally do not think of buying, such as insurance and encyclopedias. Marketing based on hard core selling carries high risks. It assumes that customers who are forced into buying a product will like it; and they would not return or do negative publicity about the product even if they do not like it. They also assume that the customer will buy their product again irrespective of whether they like it or not.
iv. The Marketing Concept:
The marketing concept believes that achieving the company’s objectives depends on understanding the needs and wants of target markets and delivering the desired satisfaction in a better way than what the competitors are doing. The job is not to find the right customers for your products, but to find the right products for your customers.
In this concept, focus on customer and value is considered to be the path to successful sales and company profits. The customer is considered the KING, and the company produces and markets what the customer wants. The marketing concept takes an outside-in perspective wherein it starts with a well-defined target market, focuses on customer needs, and integrates all the marketing activities that affect the customers.
Marketing concept is based either on one of the three orientations:
(a) Reactive Market Orientation:
In this type of orientation, efforts are made to understand and meet customers’ expressed needs. This means companies develop only very basic innovative products.
(b) Proactive Marketing Orientation:
In this type of orientation, the focus is on customers’ latent needs. Due to this, companies go for more advanced, high-level innovations.
(c) Total Market Orientation:
In this type of orientation, companies practice both a reactive and a proactive marketing orientation. These types of companies are likely to be more successful.
v. The Societal Concept:
This concept believes that organization should determine the needs, wants and interests of target markets. It should then deliver superior value to customers in a way that maintains or improves the consumer’s and the society’s well-being. To be in the race for a longer run and be profitable as well, the companies should be aware of their corporate social responsibilities.
In this regards, the companies should especially be concerned about the environment from where they use resources. The term social marketing is used to denote marketing of those products and services which has social significance or enjoy social acceptance. The objective of social marketing is to market and distribute products and services which will benefit majority of members of the society or community.
Some of the priority products of social marketing can be selling welfare schemes for rural population, child health care schemes, and nutritional concepts of low fat food for the traditional population.
The social products can take the form of family planning, anti-smoking campaigns, rehabilitation of contraceptives and other family planning inputs. Various companies carrying out philanthropist activities like Reliance Foundation, Microsoft Foundation also comes under Societal Marketing Concept.
vi. The Transactional Marketing Concept:
Transactional marketing is a business strategy that focuses on single, “point of sale” transactions. In this concept, the salesperson concentrates only on closing the sale. The emphasis is on maximizing the efficiency and volume of individual sales rather than developing a relationship with the buyer. Transactional marketing campaign focuses on the actual sales process for a product. The emphasis is put on making the sales and may include aggressive sales techniques that eventually alienate the customer.
The transactional approach is based on the four traditional elements of marketing, sometimes referred to as the four P’s:
i. Product – To create a product that meets consumer needs.
ii. Pricing – To establish a product price that will be profitable to the company while still attractive to consumers.
iii. Placement – To establish an efficient distribution chain for the product.
iv. Promotion – To create a visible profile for the product that makes it appealing to customers.
vii. The Relational Marketing Concept/The Relationship Marketing Concept:
The main objective of relationship marketing is to build mutually satisfying long-term relationships with key stakeholders in order to earn and retain the company’s business. The main aim of relationship marketing is long term profitability and customer loyalty.
Four key stakeholders for relationship marketing are customers, employees, marketing partners (channels, distributors, suppliers, dealers, agencies), and members of the financial community (shareholders, investors, analysts). Relationship marketing should create, develop, maintain, and enhance relationship with these stakeholders.
The firms design their market offerings and prices to make a profit over the customer’s lifetime by estimating individual customer lifetime value. Based on information about the consumers past transaction, many marketers are designing customized offers, services and messages for individual customers.
While designing their strategies for maintaining long-term relationship with the consumers, his demographics, psychographics, media, and distribution preferences are also considered. The main aim is to make the customer loyal to the firm in order to achieve profitable growth by capturing a larger share of each customer’s expenditures.
Another objective of relationship marketing is to place emphasis on customer retention since attracting a new customer may cost five times as much as retaining an existing one. Companies build customer share by offering a large variety of goods to existing customers. They train their employees in cross-selling and up-selling.
In line with customer relationship management (CRM), marketers must also concentrate on partner relationship management (PRM) wherein companies should build strong ties with their intermediaries’ partners such as key suppliers and distributors as they also contribute to long time success of any business.
viii. Holistic Marketing Orientation:
Holistic marketing concept can be defined as the development, design, and implementation of marketing programs, process, and activities that recognize their breadth and interdependencies.
Holistic Marketing consists of following dimensions:
(i) Internal Marketing,
(ii) Integrated Marketing, and
(iii) Performance Marketing
(i) Internal Marketing:
This type of marketing ensures participation of employees at all levels in a company. Proper coordination is imperative between the junior employees and the middle and senior managements for a marketing communication programme to be successful. Internal marketing includes hiring, training, and motivating the marketing staff so that they provide excellent service to their customers.
(ii) Integrated Marketing:
In this type of marketing, all 4 Ps should be fully integrated in order to communicate with the customers. While preparing marketing strategies, all four P’s of marketing i.e. product, price, place, and promotion are considered.
(iii) Performance Marketing:
In this type of marketing, the marketers are responsible for the financial, social, legal, and ecological effects of marketing campaign. The marketers are asked to justify the financial objectives that a campaign has achieved. In this type of marketing, the societal marketing concept comes into picture.
Term Paper # 5. Threats to Market:
Michael Porter has identified five forces that decides the intrinsic long-run attractiveness of a market or market segment which are:
(i) Threat of Intense Segment Rivalry:
A market segment is unattractive if it contains numerous, strong, or aggressive competitors; if it is stable or declining; if plant capacity must be added in large amounts; if fixed costs or exit barriers are high; or if competitors have high stakes in staying in the market segment.
These conditions will lead to frequent price wars, advertising battles, new-product introductions, and will make it expensive to compete.
(ii) Threat of New Entrant:
When entry barriers are high and exit barriers are low, few new firms can enter the industry, and poorly performing firms can easily exit. This is the most attractive market segment.
When both entry and exist barriers are high; profit potential is high, but firms face more risk since poorer-performing firms stay in and fight it out.
When both entry and exit barriers are low, firms easily enter and leave the industry and the returns are stable and low.
When entry barriers are low and exit barriers are high; firms enter during good times but find it hard to leave during bad times. This is the worst case as the result is long-lasting overcapacity and depressed earnings for all.
(iii) Threat of Substitute Products:
A market segment is unattractive when there are actual or potential substitutes for the product. Substitutes put a cap on price limits and profits. The prices and profits are likely to fall if technology advances or competition increases in these substitute industries.
(iv) Threat of Buyers’ Growing Bargaining Power:
A market segment is unattractive if buyers have strong or growing bargaining power. Buyers’ bargaining power grows when they become more concentrated or organized, when the product represents a significant fraction of the buyers’ costs, when the product is undifferentiated, when buyers’ switching costs are low, when buyers are price sensitive because of low profits, or when they can integrate upstream. To protect themselves, sellers might shift to different suppliers, or select buyers who have the least power to negotiate, or come out with such offers that buyers cannot refuse.
(v) Threat of Suppliers’ Growing Bargaining Power:
A market segment is unattractive if the company’s suppliers are able to raise prices or reduce the quantity supplied. Suppliers tend to be powerful when they are concentrated or organized, when there are few substitutes, when the supplied product is an important input, when the costs of switching suppliers are high, or when the suppliers can integrate downstream.
The best strategy which marketer can adopt in this case is to build win-win relationships with suppliers or use multiple supply sources.