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Market in Economics

Market in Economics

Market refers to a situation where buyers and sellers can easily communicate with each other. until they can exchange goods. The word marketing is often mixed with users as the same word as the word market, in fact, marketing means to engage in various activities. to bring goods and services from the source of production to the consumer at the time, place, appearance and in the required quantity.

Today’s marketing activities are based on consumers. Considering that consumers are the source of demand for products He is the one who determines the shape, size, number and is the leader who takes the money to buy products to meet the needs. The greater the demand, the larger the market size will be and the larger it will increase. Since there are many consumers and their needs are different. Therefore, marketing must try to find a way. to meet the needs of consumers in various fields as follows:

1. To provide consumers with products for consumption at all times
2. To bring products to the consumer’s place of residence
3. To enable consumers to buy products in the manner they want

Factors used to determine market size The size of the market is large or small depending on many factors. Factors include

1. Characteristics of the product The various characteristics of the product that determine the market of the product are:

1. Perishable goods such as fresh vegetables, fresh fruits, seafood, fresh flowers, etc. The market for this product is narrow. not as wide as it should be
2. Goods with large weight or volume but low value, such as kapok, stone, sand, the market for these products is also narrow.
3. Products that are not easy to move Some goods are fragile, break easily, and transport from place to place is expensive and difficult, resulting in a narrow market for these products
4. Labor products The labor market is a narrow market.
5. Product standard

2. Communications and Transportation It is a factor that affects whether the scope of the market is wide or narrow, that is, any goods can be transported from the manufacturer to the consumer through a convenient, fast and economical transportation system.
3. Government policy various government policies related to the market of goods and services will result in expanding or narrowing the scope of the market and considered as a direct result of various policies
4. Consumer demand How wide will the market be able to expand? It depends on the consumer’s demand for that product.
5. Distribution of people’s income in that country If most of the people of the country are poor and have low income, it will be difficult to expand the market for some products.
6. Religion, Culture, and Beliefs The consumption of such goods is sometimes a consequence of religious or cultural beliefs as well

The function of the market

1. Procurement of goods is to provide goods and services to sell to customers
2. Storage of goods There are two reasons for keeping goods for sale to consumers : firstly, keeping them in order to wait for the time to sell them to get a good price. because if sold in At that time, the price was still low because there were a lot of those products. second part preserved for quality suitable for consumption, such as liquor, if it has been stored for a long time, it will make the taste more appetizing
3. Sales of goods and services It is one of the important functions of the market. But the definition of merchandising may be broadened to sales promotions and advertisements to induce purchases, or any act that induces shoppers to buy more. to increase sales of goods and services and more profit
4. Product standardization
5. Transportation. In order for the product from the manufacturer to reach the consumer, it must be transported. Transport goods from the factory or the source of production to the market and to the consumer.
6. Risk Prevention The function of the market that follows due to the availability of goods for sale Another is the risk of dangers that will occur such as fire, floods , lost goods, low-priced goods, and theft.
7. Finance The financial function of the market plays a role in every step of the market.

Market Type:

In the market can be divided into many forms, namely , the type of market is divided according to the type of product. The market is categorized by type of produce as follows:
1. Factor market is the market where the factors that will be used to produce goods or services.
2. Product market is a market that sells goods or services that buyers will use for direct consumption.
3. Financial market (financial market) is a source for producers who need investment to borrow money to invest. Financial markets are also divided into
3.1 Money market is a center for short-term borrowing of funds.
with a repayment period of not more than 1 year
3.2. Capital market is a long-term borrowing center. With a repayment period of more than 1 year, we can also divide the capital market into primary market and secondary market.

The first market is where new stocks are traded. The secondary market is the market where shares that have been sold once are traded. An example of a secondary market is the Stock Exchange of Thailand (The Stock Exchange of Thailand, SET)

Difference Between Money Market and Capital Market

1. Money market is fundraising and lending in the short term no more than 1 year whereas the capital market is funding and lending in the long term more than 1 year.
2. Money market lending carries a lower risk than capital market lending.
This is because the loan term is different. (short term is less risky than long term)
3. Instruments used for borrowing
3.1 Money market uses short-term securities such as promissory notes, bills of exchange
Treasury bills, etc.
3.2 Capital market uses long-term securities such as debentures, equity shares, bonds, etc.
4. Most money market borrowings are used as working capital for business operations. But if it is to raise funds in the capital market, it will be used for investment purposes such as expanding production. investment in fixed assets, etc.

Types of markets categorized by the nature of competition

It can be divided into two types:

1. Competitive market, also known as perfect or pure competition. This type of market is very rare in the real world. It can be said that it is the ideal market for economists.
2. Non-perfect competition market, because a perfectly competitive market is a rare market because it is the ideal market for economists. Most of real-world markets are imperfectly competitive.

Considering the dividing characteristics of a market that is incompletely competitive may be divided into 2 aspects, namely the seller side and the buyer side as follows:

Imperfectly competitive market, On the seller side, it is divided into

1. Semi-competitive market, semi-monopoly Monopolistic competition This type of market is characterized by a large number of buyers and sellers. And both buyers and sellers have complete freedom to set their own sales and purchase policies without compromising. shock other people But the manufactured goods have different characteristics or standards, they are considered the same product. But there are many brands, many brands, packaging. different advertising

This causes the buyer to like or be satisfied with a particular brand of product. This allows sellers to set the price of their products even when sellers in this market have to compete with other sellers.

2. oligopoly This type of market has few sellers. And each seller will sell a large number of items. Compared to the total quantity of goods in the market, if any seller changes the price or the production and sales policy, it will affect other manufacturers.

A monopoly market is a market where there is only one seller . This gives the seller complete influence over the price and quantity of the product in order to increase or decrease the price and control the total supply as needed. Most of them are large businesses that require a lot of investment and have modern technology making other small businesses unable to compete

Imperfectly competitive market, Considered on the buyer side, divided into

1. A market where buyers are semi-monopoly and semi-competitive. (monopsonistics)
competition) This type of market is a market with a large number of buyers. But the seller is happy to sell to some buyers only.
2. A market with few buyers (oligopsony) is a market with few buyers. if any buyer Changes in the purchase volume will also affect the market price and other buyers.
3. A market with a single buyer (monopsony) is a market with only one buyer. The buyer is therefore in a position to set the price of the product himself. It is called a monopoly on purchases.