Meaning

The term market is derived from the Latin word ‘marcatus,’ meaning merchandise, trade, or a place where business is conducted. Over time, the word “market” has acquired diverse meanings depending on the context in which it is used.

Definition of Market:

General Definition: A market is a place, system, or arrangement where buyers and sellers interact to exchange goods, services, or information, either physically or virtually.

Economic Definitions:

Philip Kotler: “A market is the set of all actual and potential buyers of a product or service.”

Prof. Joan Robinson: “A market is a group of buyers and sellers in free intercourse with one another.”

Prof. Cournot: “A market is not a specific place but a system or an area in which buyers and sellers interact to determine the price and quantity of a product.”

Alfred Marshall (British Economist) “A market is the sphere within which the price-determining forces of demand and supply operate and buyers and sellers negotiate transactions.”

Paul Samuelson (American Economist) “A market is an institutional arrangement through which buyers and sellers exchange goods and services.”

Definition of Marketing:

General Definition: Marketing refers to the process of identifying, anticipating, and satisfying customer needs and wants through the creation, communication, and delivery of value.

Popular Definitions:

Philip Kotler: “Marketing is the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit.”

American Marketing Association (AMA): “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”

Functional Definition: Marketing encompasses various activities such as market research, product development, pricing, promotion, distribution, and customer relationship management aimed at achieving organizational goals.

Components of a Market

To establish a market, the following conditions (necessary and sufficient) must be met:

• Existence of a Commodity: There must be a good or service available for transaction (its physical presence is not essential).
• Presence of Buyers and Sellers: Markets require individuals or entities willing to buy and sell.
• Interaction Between Buyers and Sellers: A business relationship or direct interaction between the two parties is vital.
• Defined Market Area: This could be a specific location, a region, a country, or even the entire world.