The 18 types of markets and their characteristics

Markets are basically physical or virtual spaces in which goods and services are sold and sold. Not all of them are the same, having different variables that allow us to talk about different types of markets

Depending on the product that is bought and sold, the type of buyer, whether or not there is competition and the geographical area in which the commercial activity is carried out, we can talk about all kinds of markets that we will discover below.

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What are the different types of markets?

Before going further into the types of markets, we will briefly explain what they are. From a microeconomic point of view, market is understood as the set of offers and demands related to a good or service. Within this concept, one of the following two perspectives can be performed, one being that of supply, that is, sellers, and the other is demand, that is, buyers or consumers.

From the business point of view, and taking into account that every company is interested in capturing the maximum number of buyers, the demand market will be interesting, that is, the buyers. Thus this concept can be redefined within this perspective as the set of buyers potential, both natural and legal persons, of the goods and services produced by different Business.

Once we understand what a market is, we go on to see its different types. The markets can be classified based on four variables, which are:

• Product
• Buyer
• Competence
• Geographic area covered

Depending on the type of product being offered or purchased, the buyer's profile, whether or not there is competition and how wide the area is geographical area in which a company or group of them distributes its goods and services we have the following 18 types of markets different.

1. Market types based on product

Taking into account the type of product that is bought and sold we can talk about the following types of markets:

1.1. Market for consumer products or perishable goods

The consumer products market is one in which products are marketed aimed at satisfying a need for immediate or short-term consumption. The products that are bought and sold are used to cover a need that is solved when this product is used. The product loses its usefulness or directly disappears once it is used.

An example of this is all the foods in a market. All of them are aimed at satiating hunger, as is eating an apple or a banana that, at the moment we eat them, can no longer be used.

1.2. Use or investment products market

In the consumer goods market, also called investment goods or capital goods markets, which What happens is that products are exchanged that will be used to cover a need but, unlike the market previous, this good will not disappear in the first use, although it must be said that the durability of the product can be very varied.

In itself, the durability is more extensive than that of consumer products, but it may be the case that it is long, as in the case of computers, or very short, such as a pencil. In this second case, the pencil will satisfy our need to write and draw a few times until it runs out and we have to buy a new one.

1.3. Industrial Products Market

In the industrial products market all products that are used as input or raw material to produce other goods or services are includedIn other words, it is the market in which the materials that will be transformed into all kinds of objects are sold.

An example of a market for industrial products is the steel trade, which can be used to build anything from huge airplanes to our everyday household appliances.

1.4. Services market

As its name indicates, in the service market, services are offered, in which the consumer cannot acquire property, but rather the provision of a service. This market would include any human activity that was paid for both with personal funds and public, such as public education, the mobile phone service that we have contracted, receive a massage...

1.5. Financial markets

The idea of ​​financial markets is much more complex than the other four types of markets based on the product they offer. These types of markets are a physical or virtual space through which financial assets are exchanged between different economic agents. It is through their transactions that the prices of such assets are defined.

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2. Market rates based on buyers

Next we will see the types of markets based on the buyers.

2.1. Dealer market

The distributors market includes all companies that buy products not to consume them but to resell them at a higher price than they bought it and, in this way, obtain profits and defray the expense with the acquisition of such products.

An example of a distributors market is any supermarket in which products are bought from companies manufacturers reselling them to final consumers at slightly higher prices so that the establishment has Profits.

2.2. Industrial buyers market

The Industrial Buyers Market It is made up of all the companies that buy resources to carry out their production process. That is, they are those buyers who buy materials to transform them into all kinds of products.

We would have an example of a market for industrial buyers in any shoe company that buys leather, other fabrics, cardboard and metal to manufacture this type of footwear and other accessories such as bags or clothing wear.

2.3. Government or institutional buyers market

The government buyer market encompasses all government institutions that purchase goods and services to provide public services to citizens. Citizens are, in an indirect way, the ones who actually buy these products and services by paying their taxes.

An example of this would be the public health sector which buys medical devices, pays sanitary services, contracts cleaning companies for public hospitals, initiates programs to prevent diseases...

2.4. Consumer market

The consumer market is made up of all buyers looking to purchase goods and services that are sold on the market to meet their needs. Anyone who goes to buy a table at the furniture store buys a loaf of bread at the bakery or goes to the gym to pay the user fee is someone who is part of this consumer market.

2.5. Work market

The labor market, also called the labor market, is one in which supply and demand for employment converge. The job offer is made up of the set of unemployed workers who are willing to exercise a profession and the demand for work is made up of the set of companies or employers that want to hire the workers.

3. Market types based on competition

Based on the type of competition faced by producers and suppliers of goods and services, we are talking about the following types of markets.

3.1. Perfect competition market

The perfectly competitive market is a theoretical situation in which there is an infinite number of competitors in which none of them has the power to set prices within the market, making practically all products of the same type equal in terms of quality and price. In practice the market of perfect competition does not exist.

3.2. Imperfect competition market

The imperfectly competitive market is the situation between perfect competition and pure monopoly. There are times when the prices of the products are similar, but in others they change and a company ends up offering a product with a more advantageous quality-price ratio, which attracts more customers than the rest of the company that offers the same product.

3.3. Pure monopoly market

The pure monopoly market is the situation that occurs when a single company offers goods and services that are sold in a market. That is, it occurs when a specific service or good can only be found in a company, which has total power and control on its price, being able to raise it through the roof and get the most out of it by not having any competitor to take away its customers.

4. Market types based on the geographic area covered

According to the geographic scope that the market covers, we can talk about the following types.

4.1. Local market

The local market is the one serves a small area of ​​the market such as a city, region or at most a province, being the smallest commercial area that exists. Several examples of this would be the bakery that the residents of a street go to, the market that the people from the Horta neighborhood or the shopping center where the inhabitants of an entire region go as it would be Barnasud.

4.2. Regional market

When we talk about the regional market, we are talking about the one that serves an administrative area within a state (province, autonomous community, federated state ...) or an indeterminate geographical region, such as the north or south of a country. It can also refer to supranational regions, such as the Central American region, Western Europe, the Far East ...

4.3. National market

The national market is one that covers an entire sovereign country or what can be understood by nation, extending through all the cities, provinces, counties, departments and other political-administrative entities that make up the state. An example of a national market is the RENFE company that offers its rail services throughout Spain.

4.4. International market

An international market is one that It is made up of a group of buyers that can be from different countries. These markets are generally served by multinational or transnational companies and some examples of this are found in Coca Cola, Burger King, Honda and Mondelēz International.

4.5. Global market

The global market refers to a market that spans every country in the world. At this level, the goods and services offered by a certain company or group of them are produced and marketed in any country in the world. The global market is the largest and most extensive of the types of markets out there.

Bibliographic references:

• Ridao-González, J. M. (2016) Business Economics. Spain. Algaida editors.