The 18 Types of Markets and Their Characteristics

Markets are, basically, physical or virtual spaces in which goods and services are bought and sold. Not all of them are the same, there are different variables that allow us to talk about different types of markets.

Depending on the product that is bought and sold, the type of buyer, whether or not there is competition and the geographical area in which the commercial activity is carried out, we can speak of all types of markets which we will discover below.

What are the different types of markets?

Before going into more depth about the types of markets, we are going to briefly explain what they are. From a microeconomic point of view, a market is understood as the set of offers and demands related to a good or service Within this concept, one of the following two perspectives can be played, one being that of supply, that is, the sellers, and the other that of demand, that is, the buyers or consumers.

From a business point of view, and taking into account that every company is interested in attracting the maximum number of buyers, the demand market will be interesting, that is, that of buyers. Thus, this concept can be redefined within this perspective as the set of potential buyers, both natural persons and legal entities, of the goods and services produced by different companies.

Once we understand what a market is, we move on to see its different types. The markets can be classified based on four variables which are:

Depending on the type of product that is offered or purchased, the profile of the buyer, whether or not there is competition and how wide the geographical area is in which a company or group of them distributes its goods and services, we have the following 18 types of different markets.

1. Market types based on product

Taking into account the type of product that is bought and sold We can talk about the following types of markets:

1.1. Market for consumer products or perishable goods

The consumer products market is one in which Products are marketed to satisfy an immediate or short-term consumption need The products that are bought and sold are used to cover a need that is resolved when this product is used. The product loses its usefulness or disappears once it is used.

An example of this is all the foods in a market. All of them are aimed at satisfying hunger, such as eating an apple or a banana that, when we eat them, can no longer be used again.

1.2. Market for use or investment products

In the market for used products, also called markets for investment goods or capital goods, what happens is that products are exchanged that will be used to cover a need but, unlike the previous market, This good will not disappear on the first use, although it must be said that the durability of the product can be very varied

The durability itself is longer than that of consumer products, but it may be long, as is the case with computers, or very short, as would be a pencil. In this second case, the pencil will satisfy our need to write and draw a few times until it runs out and we have to buy a new one.

1.3. Industrial products market

In the industrial products market All products that are used as an input or raw material to produce other goods or services are included that is, it is the market in which the materials that will be transformed into all types of objects are sold.

An example of an industrial products market is the trade in steel, which can be used to build everything from huge airplanes to our everyday household appliances.

1.4. Services market

As its name indicates, the services market offers services, in which The consumer cannot acquire ownership of a good, but rather the provision of a service This market would include any human activity that was paid for with both personal and public funds, such as public education, the mobile phone service that we have contracted, receiving a massage…

1.5. Financial markets

The idea of ​​financial markets is much more complex than the other four types of markets based on the product they offer. These types of markets are a physical or virtual space through which financial assets are exchanged between different economic agents It is through their transactions that the prices of such assets are defined.

2. Market types based on buyers

Next we will see the types of markets based on buyers.

2.1. Distributor market

The distributor market includes: all companies that buy products not to consume them but to resell them at a higher price than the one they bought it for and, in this way, obtain profits and cover the expense with the acquisition of such products.

An example of a distributor market is any supermarket in which products are purchased from manufacturing companies and resold to final consumers at slightly higher prices so that the establishment makes a profit.

2.2. Industrial Buyers Market

The industrial buyers market It is made up of all companies that buy resources to carry out their production process That is, they are those buyers who buy materials to transform them into all types of products.

An example of a market for industrial buyers would be any shoe company that buys leather, other fabrics, cardboard and metal to manufacture this type of footwear and other accessories such as bags or clothing.

23. Government or institutional buyers market

The Government Buyer Market encompasses all government institutions that purchase goods and services to provide public services to citizens Citizens are, in an indirect way, the ones who really buy these products and services by paying their taxes.

An example of this would be the public health sector, which buys medical devices, pays health workers, hires cleaning companies for public hospitals, initiates disease prevention programs…

2.4. Consumer market

The consumer market is made up of all buyers seeking to acquire goods and services sold in the market to satisfy their needs Anyone who goes to buy a table at the furniture store, buys a loaf of bread at the bakery, or goes to the gym to pay the user fee is someone who is part of this consumer market.

2.5. Work market

The labor market, also called the labor market, is one in which employment supply and demand come together The labor supply is made up of the set of unemployed workers who are willing to practice a profession and the labor demand is made up of the set of companies or employers who want to hire workers.

3. Market types based on competition

Based on the type of competition that producers and suppliers of goods and services face, we talk about the following types of markets.

3.1. Perfect competition market

The perfectly competitive market is a theoretical situation in which There is an infinite number of competitors in which none of them has the power to set prices within the market, making practically all products of the same type equal in terms of quality and price. In practice, a perfectly competitive market does not exist.

3.2. Imperfectly competitive market

The imperfectly competitive market is the situation between perfect competition and pure monopoly There are times when the prices of the products are similar, but in others they change and a company ends up offering a product with a more advantageous quality-price ratio, which attracts more customers than the rest of the companies that offer the same product.

3.3. Pure monopoly market

The pure monopoly market is the situation that occurs when a single company offers goods and services that are sold in a market That is, it occurs when a specific service or good can only be found in a company, which has total power and control over its price, being able to raise it through the roof and get the most out of it by not having any competitor that take away your clients.

4. Types of market based on the geographical area covered

According to the geographical area covered by the market, we can talk about the following types.

4.1. Local market

The local market is the one serves a small area of ​​the market such as a city, region or at most a province, being the smallest commercial area that exists. Several examples of this would be the bakery that the residents of a street go to, the market that the people of the Horta neighborhood go to, or the shopping center that the inhabitants of an entire region go to, such as Barnasud.

4.2. Regional market

When we talk about a regional market, we are talking about one that serves an administrative area within a state (province, autonomous community, federated state…) or an indeterminate geographic region, such as the north or south of a country. It can also refer to supranational regions, such as the Central American region, Western Europe, the Far East…

4.3. National market

The national market is one that covers an entire sovereign country or what can be understood as a nation, spreading through all the cities, provinces, regions, departments and other political-administrative entities that make up the state. We have an example of a national market in the company RENFE, which offers its railway services throughout Spain.

4.4. International market

An international market is one that It is made up of a group of buyers who can be from different countries Generally these markets are served by multinational or transnational companies and we have some examples of this in Coca Cola, Burger King, Honda and Mondelēz International.

4.5. Global market

The global market refers to a market that extends throughout all the countries of the world At this level, the goods and services offered by a specific company or set of them are produced and marketed in any country in the world. The global market is the broadest and most extensive of the types of markets there are.