What is the meaning of a Market and types of Markets
A market is a place of trade and making transactions in respect of the goods or services bought.
The parties involved in the transaction are the seller and the buyer where the goods or any services are sold by the seller and bought by the buyer in exchange for money.
The word ‘market’ has been derived from the Latin word “Mercatus” which means a place of transacting or trading.
What are the Types Of Markets?
- Physical markets: A place where seller and buyers meet in person to buy and sell the goods in exchange for money.
Department stores, retail stores, supermarkets are a few examples of Physical markets.
2. Non-psychical or virtual markets: These are online platforms for example– Amazon or eBay where products are showcased virtually and the transactions are made online where the buyer and seller needn’t interact physically.
3. Financial market- it is a market that deals with the exchange of liquid assets, i.e., money.
The different types of financial markets are-
- Stock Market: A market where shares are bought and sold.
2. Foreign Exchange Markets: it is a market that is also known as a currency market where one party exchanges the currency of a country with an equivalent quantity of another currency.
3. Bond Market: A bond is a signed contract where parties to the contract promise to return the money with a settled interest rate at fixed intervals.
Therefore, a bond market is a market where the seller and the buyer is engaged in the exchange of debt securities usually in the form of bonds.
4. Auction Market: A place where the seller sells his goods to the buyer who bids the highest for his goods.
5. Black Market: A market where goods are sold illegally. Goods such as weapons or drugs.
6. Knowledge Market: A place where knowledge-based products (information) is sold.
Based on Sales:
- Service market: A market where services are sold and where customers pay for the services they avail. For example- A spa, or a Saloon, Taxi or other transportation services.
- Commodity Market: it is a market place where the buying, selling and trading is done physically or virtually of primary or raw products such as gold, coffee or tea.
- Financial market: Financial markets refer to a market place where the trading of all types of securities takes place that includes the bond market, the stock market, derivatives and forex market, among others.Financial markets are extremely important for a country‘s economy because when it collapses, it results in economic disruption causing unemployment and recession.
Some of the examples of financial markets are – stock market, money, forex, derivative market, cryptocurrency markets and bond markets.
- Labour market: A labour market is a place where the workers and employers interact with each other where the employer aims to hire the best worker and the workers compete to get the best paid and suitable job.
Based on Geographical Area-
- Local market: A market that is limited to a certain city or a locality and cater to the needs of the locals of products like fruits and vegetables or milk or bread.
- Regional Market: A market that is just not limited to a locality but is extended to a regional level. Products of the regional market would be oil, sugar, wheat or ragi or paddy or pulses.
- National Market: A market that is limited within the geographical area of a country where products like a specific tea brand or certain type of clothes, cement is sold within the limits of the country.
- International Market: A market place where goods that are produced nationally are even sold to other country or countries around the world.
Such markets are also known as global markets or import-export markets.
For example- A car brand that is sold nationally is also sold internationally.
Or a noodle or a clothing brand that is just not found in your country but in another country or countries as well.
Based on Control-
- Controlled market: A market that operates under the control of any government body. For example- The foreign exchange market.
- Uncontrolled Market: A market that functions freely and is not under the control of a government body or organisation.
A market where the seller has the freedom to determine the price and production of the product he’s selling.
Where products such as T.V, fridge, sofa or bed, table, bags are sold.