Types of Market
concept of market
defines it as the actual or potential demand
for a product or service for a certain period of time.
Analyzing the market reveal more
from the reference product market to
brand market or company market.
The reference product
includes all the consumers of all products that satisfy the same need
and all the suppliers for those products. It represents the mass of
consumers or users of the same kind of products, not considering the
brand or the producer. This market has actual geographic, demographic
and social limitations.
A company's performance
certain product's market is indicated by :
- Market share – represented by the percentage of the total
product market that the company supplies. This indicator is calculated
by dividing the sales(quantity or amount) to the sum of all the sales
on the market.
- Relative market share – indicates the position of the
company relative to the main competitors. The relative market share
results from dividing the sales of a company to the sales of the market
leader. For the market leader, the relative market share is relative to
the following company by sales.
The main types of markets
established considering various criteria:
- Customers' interest, buying power and reach:
- Total market – containing all the customers
- Potential market – members of the total market that
express an interest for the product
- Available market – members of the potential market that
dispose of financial resources and can reach to the product
- Qualified available market – members that express an
interest, posses the financial resources and are ready to purchase the
- Target market – the segment of the market that the
producer focuses on
- Penetrated market – all the customers that bought the
- Considering the substitution and complementarity relations
- Main market – all the similar products sold on the market
that are in direct competition
- Adjacent market – different products that satisfy the same
requirements in the same consumption circumstances
- Support market – represented by the products that contain
the product of another company( the automobile industry is a support
market for tyre industry)
- Generic market – all the products that satisfy the same
needs. Comprises the main market and all the adjacent markets.
- Geographical location:
- Intern market
- International market.
Evaluating the market size
implies the following aspects:
- Market capacity(the maximum market size) is the maximum
quantity of the reference product that can be absorbed by the
customers, only limited by the physical and biological limits of the
consumers(not taking into account the price).
- Actual market – the demand available, the clients that
have already bought the product.
- Total market potential – the maximum volume of sales that
can be attained by the group of companies manufacturing a product, in a
certain period of time.
is the maximum sales volume possible for a product
is the number of individuals in the market
is the average quantity bought by a person
is the price of the product.
evaluating the market size, aspects like the product, the product
range, the company, the geographical area need to be considered.
- Saturation level – the actual sales divided by the
maximum market potential.