http://www.bized.ac.uk
Types of Market
VCE Business
Copyright 2004 – Biz/ed
http://www.bized.ac.uk
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 place
or
Not exist physically at all
Copyright 2004 – Biz/ed
http://www.bized.ac.uk
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
Copyright 2004 – Biz/ed
http://www.bized.ac.uk
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
Copyright 2004 – Biz/ed
http://www.bized.ac.uk
New Ideas for Selling to
Consumers
Alternatives to conventional
retailing:
• Mail order (including catalogue
shopping)
• Online, Web-based selling (‘etailing’)
• Direct producer-to-consumer
selling
Copyright 2004 – Biz/ed
http://www.bized.ac.uk
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
Copyright 2004 – Biz/ed
http://www.bized.ac.uk
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/index.htm
Copyright 2004 – Biz/ed
http://www.bized.ac.uk
What’s Traded on Commodity
Markets?
Goods traded on commodity
markets include:
• coffee
• cocoa
• oil
• precious metals
• diamonds
Copyright 2004 – Biz/ed
http://www.bized.ac.uk
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)
Copyright 2004 – Biz/ed
http://www.bized.ac.uk
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
Copyright 2004 – Biz/ed
http://www.bized.ac.uk
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
Copyright 2004 – Biz/ed
http://www.bized.ac.uk
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/stafsup/options/argu
ment/arg10-2.htm
• ‘Derivatives’ markets
Copyright 2004 – Biz/ed