What is a Market

The market definition is as follows

“An aggregate of people who, as individuals or organizations, have needs for products in a product class and who have the ability, willingness and authority to purchase such products”

However, the definition of Market can be too much and here is the breakdown of what a market is.

A) A market is comprised of people – Quite simple, but correct. Now, who those people are can differ for each industry. For Canon, the people are people who can buy printers and copiers and who need those printers. Similarly, for Intel, people are those who need computers. So let us delve deeper into what is market.

B) A market is comprised of people with needs wants and demands – I strongly recommend that you read this article on Needs wants and demands. Based on their situation in life, people might have a need (food, vegetables), they might have a want (motorcycle, car) or they might have a demand (Audi, BMW). So, the market for you might vary based on their needs wants and demands.

C) A market is comprised of people with needs wants and demands and the buying ability or buying power to purchase the products – This is the 3rd definition of marketing and it simply says that the needs wants and demands are important, but ultimately the market should have the right people who have the buying power.

BMW & Audi marketing themselves to C grade towns is useless. So is Maruti marketing only to A grade towns. Hence, whenever you are studying a market, studying what kind of people the market is made of is also important.

D) A market constitutes of decision makers – A corporate, which wants to sell to other corporates (B2B Sales) will view the market only on the basis of decision makers it has. The corporates might have a lot of factories in City X. But if the decision makers are sitting in City Y, then for the seller, the market is City Y and not City X.

The market definition basically says that the market keeps changing based on the people you are going to target. The market might comprise of middle class people or rich people, but it will not constitute of all people unless and until you are a mass marketing company.

Now when you go through the definition of market again, you will find it very simple. Important thing is to analyse the market before entering with a new product.