The term "market," as a noun, refers to all the current and potential consumers or businesses who would use a company's products. Markets can be very diverse and consist of many characteristics. The business owner must locate viable markets for the company's products, apprise consumers of its wares and services and make products available to them. A market typically consists of a number of sub-groups that a company must identify as its key buyers.
From a macroeconomic standpoint, a market is synonymous with the industry of which a company is a part. For example, if you sell consumable packaged drinks to consumers, you are in the consumer products or packaged goods industry. Restaurant companies are in the restaurant industry, and companies that produce gaskets or airplane parts are in the industrial sector. Industries also consist of many different markets, some local, regional, national and even international. The size of your company may dictate how large a market you service. For example, small retailers usually deal with just the local market, which may lie within a 5-mile radius of their stores.
Consumer Vs. Business Markets
Companies usually sell to either consumer of business markets. A consumer market consists of shoppers who buy your products from retailers, restaurants or wholesale food establishments. Business markets include customers who purchase services like advertising or consulting. Business customers tend to buy less frequency but at higher dollar volumes. For example, a marketing consulting firm may charge a small manufacturer $250,000 to assess its production facilities. Consumer market customers typically purchase items more frequently and at lower dollar amounts. Another distinction between business and consumer markets is that products and services are customized for business customers, according to marketing consultants at Dobney.com. For example, an advertising agency may track ad results for one firm and not another one. Most consumers goods are not custom-made: A package of peanuts is priced for all consumers, and each consumer who pays that price receives an identical package of peanuts.
Companies must sometimes further segment their markets. For example, not all women buy high-end dresses. A high-end dress shop may conduct market research to determine which women are most likely to buy expensive dresses. Subsequently, the high-end dress shop owner may find that women from age 40 to 54 with incomes over $100,000 are her primary customers. The shop owner might then focus on attracting women 40 to 54 with higher incomes. Companies are better off finding a particular niche in the market, whether attracting customers with lower prices or high quality name brands.
Companies must make their products available for customers in order for customers to buy them. For example, consumer products companies usually sell their products through retail grocery, drug and mass merchandiser stores. High-end plumbing supply manufacturers often use kitchen and bath showrooms to display their wares, such as sinks, bathtubs and the hardware that accompanies them. Companies study where competitors are marketing their products to ensure the proper distribution channels. Another way to determine correct distribution channels is through surveys seeking customer input.
Market as a Verb
The term "market" is also a verb that means to promote or advertise a product. Companies market their businesses through many different media, including the Internet, direct mail, magazines, radio, television and the distribution of fliers. Most companies market their products and services using a combination of different media, such as television and magazine display ads.