Market: A market consists actual and potential buyers of a product.
1. Consumer market: This is the group of individuals who buys product for ultimate personal consumption or for family use. Purchase is small, consumed within a short time and a wide range of goods is usually purchased.
2. Producer or industrial market: The buyers are industrialists or producers whose motive for buying the product is to use it in the production of another good. The buyers are experts and follow official procedures in buying a narrow line of products in very large quantity. These producers buy raw materials, finished, and semi-finished goods for production or daily operations. The items bought serve as factors or inputs of production. Examples of industrial goods include hand tools, chemicals and industrial machines and so on.
The difference between consumer market differ and industrial market
Consumer market is the market where an individual or household buys products for personal or household consumption, while industrial market is the market where producers or industrialists buy products for the purpose of further production or as an input for administrative activities. For example, a bag of rice purchased by a household for the purpose of consumption will be a consumer product, while another bag purchase for the restaurant run by the same household will be an industrial product.
3. Government market: Federal, State and Local governments in any country buy sufficient goods that make up a big market. They buy for internal operations and to render social services. They use bidding or negotiated contract – a set of procedure for purchasing. Examples of the goods are imported rice, cement for construction of buildings, drugs for hospitals and fertilizer for farmers
4. Institutional market: Non-profit organisations buy goods to achieve their goals. Schools, churches, clubs, charitable organisations, and international organisations for example purchase specific goods in fairly large quantities. Among the goods purchased are stationery and computers.
5. Reseller market: This consists all marketing intermediaries such as Wholesalers; Retailers, etc who buy products for resale at profit. They often time do not change quality but quantity of the product. Their major reason is to resell the products at reasonable profit. Those retailers in your neighbourhood buy different goods such as pen, tins of milk, soap, sweet and other consumables, which they sell to consumers.
6. Global market: These are consumers located outside the home country of the producers. To satisfy their needs, the producers have to operate across international borders for exportation, direct investment and other foreign marketing practices.
Evolution or Stages of Marketing Development
The origin and evolution of marketing are tied to history of man- civilization. Swartz (1973) remarks that marketing can be traced way back into human history. According to him, Egyptians and Phoenicians, Greeks and Romans all had well-developed track systems. International trade existed long before the birth of Christ. The Old Testament contains many references to such marketing topics as money, wealth, credit, products, international trade middlemen, pricing and trade fairs among others.
Marketing grows with the development of man. It started with trade by barter involving exchange of goods for goods. Marketing as a crucial human invention has since its inception undergone many changes in line with stages of cultural, technological advancement and economic development. Most industrialized countries such as USA, United Kingdom, and Japan, have passed through a number of these changes. Many developing countries such as Nigeria, Ghana and Botswana, are still struggling at lower levels of marketing achievement, hence they have gone through fewer stages of economic and marketing development.
The emergence of modern marketing thought and practice is seen to have dated from the mid-1800s in advanced countries like United States of America and early 1900s in developing countries such as Nigeria. Before the advent of modern marketing, a form of exchange relationship within the society had however been in existence (Osuagwu, 1999). This exchange relationship started when individuals were able to produce given items more than they could consume. The evolutionary stages/phases orientations of marketing identified by marketing authorities include:
Trade by barter stage: This was the era when goods were exchanged for goods. It refers to the early stage before the introduction of money. Then money was never used as a medium of exchange. For example, the exchange of garri for yam in the Yoruba community demonstrates this practice. Also counter-trade business between Nigeria and Brazil may be an example of Trade by Barter practice.
Production orientation era: Industrial Revolution gave room for mass production and mass marketing. Many cities developed and rural-urban drift occurred in the search for employment in emerging factories. Manufacturing activities result in increasing wealth and purchasing power.
The production concept, otherwise known as manufacturing era, is characterized by its focus on solving the problem of production. The major concern is on producing what the company can make instead of letting customers’ needs and wants determine what is produced. It implies selling what producers can make instead of making what they can sell. This orientation places emphasis on supply. Customers are seen as existing to buy the company’s products rather than the company existing to serve customers. Profit is rather viewed from increased output and minimizing cost than from continued patronage of satisfied customers.
Generally, the conditions that favour the adoption of production concept may arise from monopoly (usually state sanctioned), low competition, a cartel operation or even when shortages exist in the economy, and these will result in ready demand.
The Nigerian govemment parastatals like Power Holding Company of Nigeria (PHCN) and other public utilities are examples of companies adopting production concept.
Product era: Under this era, producers, in response to customers’ complaints, improved on the quality of their products to make them more appealing and durable. Selling orientation era: During the great depression across the world, demand for products fell and sales department was most recognized to dispose off massive quantities of unsold products. Production and engineering personnel were responsible for production, sales department sold the products at a price set by production and financial executives. Sales departments were set up, headed by sales managers and their sales force. Advertising and marketing research were separated. It is believed that consumers and business will not buy enough products if producers leave them alone. Therefore, organizations have to do rigorous selling and promotion. It is aimed to sell what producers make rather than what the market wants.
In this era, emphasis was placed on sales management issues. The company relied on the ability of its salesmen for the achievement of its marketing objectives. As the problems of production were solved and competition increased, emphasis shifted to what is produced. Sales forces were developed to employ hard sell or high pressure selling techniques. Various sales promotion gimmicks were adopted to woo customers as distribution was extended.
Selling concept is noticeable among small retail outlets that are not concerned about their image. They include hawkers on the streets, service companies such as life insurance, corporate marketing ladies of new generation banks and many other companies in competitive industries whose management are unwilling to adopt the selling concept.
Marketing concept era: This era believes that marketing begins and ends with the customer. The marketing concept is a marketing philosophy of being customer-oriented at a profit. The organisation gears its total efforts to marketing rather than selling.
Focus of marketers was on coordinating marketing management by paying closer attention to consumers to make more sales and profit. Marketing was full blown and headed by marketing managers. The managers performed functions of inventory control, warehousing, and product planning, among others. According to Kotler and Armstrong (2008), achieving corporate goals depends on knowing the needs and wants of target consumers and delivering the desired satisfaction better than competitors. It starts with defining the target market, focusing on their needs and integrating all marketing activities that affect the consumers. Marketing orientation is a philosophy that urges producers to find the right products for customers. It involves creating, delivering and communicating superior customer value to the target markets.
Customer value creation is established by:
Offering lower prices relative to competing goods
Use of cross functional teams to develop products
Innovative products and
For a business enterprise to implement the marketing concept properly and successfully there must be willingness on the part of top management to fully embrace the concept. Marketing orientation must begin with top management who provides the climate, discipline and leadership needed for a vigorous marketing programme.
A marketer conducts his business for the ultimate purpose of meeting his customers’ needs and achieving his own profit objective. Thus, it entails the marketer finding out from the customers about their needs, developing or acquiring the products to fill those needs, plan and organise marketing programmes that will bring the products to the customers in a manner that will result in achievement of stated goals.