types of market. what are markets? a market is where buyers and sellers: meet to exchange goods and...
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Types of Market
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What are Markets?
A market is where buyers and sellers:• meet to exchange goods and services• usually in exchange for money
The market may be in one specific placeor
not exist physically at all
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An Invisible Market?
Markets can exist:• over telephone lines• online• in emails
As long as what happens involves buyers and sellers in a business transaction
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Consumer Markets
You should be familiar with these:• consumers interact with sellers
to buy goods and services• sellers can be retailers using high street shops
or out-of-town stores • sellers can use other sales media
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New Ideas for Selling to ConsumersAlternatives to conventional retailing:
• Mail order (including catalogue shopping)• Online, Web-based selling
(‘e-tailing’)• Direct producer-to-consumer selling
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Industrial Markets
The business world’s equivalent of consumer markets:
• business organisations sell to other businesses• not to a final consumer• these other businesses use what they’ve
bought to make new products
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Commodity Markets
Buying and selling products from the primary sector of industry:Use the Biz/ed Glossary to check what ‘primary sector’ means at:
http://www.bized.ac.uk/glossary/glossary.htm
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What’s Traded on Commodity Markets?Goods traded on commodity markets include:
• coffee• cocoa• oil• precious metals• diamonds
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Rich and Poor?
Commodity markets often have their centres in developed countries (UK, USA, Netherlands)
The commodities themselves often originate in the developing world (Latin America, sub-Saharan Africa)
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Impact on Rich and Poor?
Commodity market prices can fluctuate wildly:
• rising prices for oil causes inflation in developed countries which need oil for energy
• falling prices for coffee, cocoa, copper and so on cause poverty for many in developing world
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Capital Markets
Businesses need capital in order to operate:
• small firms may borrow or sell shares to family and friends
• larger companies use the stock market to sell shares
• this is known as ‘equity’ capital
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Other Capital Sources
• Borrowing on the ‘bond’ markets. Used by Leeds Utd FC to finance their ambitions
• More on this in Biz/ed’s ‘Wanna Argument’ at: http://www.bized.ac.uk/current/argument/arg10-2.htm
• ‘Derivatives’ markets