FORM SIX COMMERCE – MARKETING

           This is a place where buyers and sellers meet and exchange will take place.

           OR

           Is a relationship that exist between buyers and sellers and no matter they communicate each other.

          CONDITIONS (ESSENTIALS) FOR EXISTENCE OF THE MARKET

          These includes

1. Existence of commodities.
2. Existence of buyers and sellers.
3. Existence of price.
4. Competition.

 

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              TYPES OF THE MARKET

      Markets can be classified into 4 groups of 8 types as follows

1. According to type of products exchanged

 

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    The following types can be formed

• Primary market.
• Secondary market.

 

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2.According to geographical position of buyers

    The following types can be formed

• Local market.
• International market.

 

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       3.According to groups of buyers

    The following types can be formed

• Consumer market.
• Producer market.

 

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       4.According to the time exchange take place

    The following types can be formed

• Spot market.
• Future/forward market.

 

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               MARKET SEGMENTATION

   Refers to the partitioning of potential customers or consumers into group of differentiated submarkets. It involves the following characteristics;

• Cultural grouping.
• Geographical variations.
• Behavioral pattern.
• Social economical variables.

 

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               FUNCTIONS OF MARKET

         The following are functions performed by market;

1. To facilitate transactions.
2. Source of supply.
3. Provision of contact between buyers and sellers.
4. Stabilize prices.
5. Motivate and increase production.
6. Self employment like entrepreneurs.
   
   

 

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              MARKETING RURAL PRODUCTS

              COMMODITY MARKET

A commodity market is highly specialized market where raw materials are bought or sold on an international level.Different commodities are dealt in different markets, all of which have their own methods of trading e.g tea, and coffee are graded and sold in auction according to their grades. Whereas metals are sold by private negotiations between member brokers are involved in trading to represent buyers and sellers.

The beneficial effects of a commodity market include the following;

      -It helps in custom, control over raw materials concentration of demand for raw materials situation of a port or an important trade route and other similar influences. This is due to the act that each of
these markets is centralized or localized in some important city though it embraces world in the course of its operations.

     -Also a commodity market provides highly developed facilities not only for gathering together of buyers and sellers but also for fixing prices, grading commodities and the publication of market reports
containing particulars of prices, quantities sold and information which are helpful to participants.

     – Most of these markets are conducted on the basis of samples and grade. This enables transactions to be affected by telegrams, letters or by simple reference to the grades or samples.

   GENERAL MARKETING OF AGRICULTURAL PRODUCTS

  (I) Agricultural products from small scale farmers.Small scale farmers sell most of food crops through either;

     a)Directly selling the final consumer or

     b)Selling to traders who then sell to final consumers.But most of cash crops from small scale are sold either

     c) To the buying agents who then either sell to the marketing board which also sell in both local and foreign market

                 or

        To the cooperatives which then sell in both local and foreign market.

  (II)Agricultural products from large scale farmers-Most of large scale farmers sell cash crops to the marketing boards or directly to the foreign
market.Those crops are then sold to processors who them into finished goods which are then sold to final consumers in both local and foreign
through wholesalers and retailers.

 THEORY OF MARKET

Meaning of market

-Market means anybody a person who are intimate business relations and carry on extensive trans cross in any commodity.

 -Market-Is a set of arrangement whereby buyers and sellers come into contact to exchange goods and services.

     ESSENTIALS OF MARKET:

1.Presence of a commodity

In the market there must be commodities which have been bought for sale.

      2.Presence of Buyers:

The people who are able and willing to purchase the commodities being sold at particular price and time.

3. Presence of seller.

The people who have brought their commodities for sale.

4.Presence of an area(region)

Refer to a particular locality where the transactions are taking place

5.Price

One price should prevail for the same commodity at same time

     EXTENT OF A MARKET

Refers to the size of the market. The market may be wide or narrow.

    Determinants of the size of the market

      1.Character of the commodity

          In order to have a wide market a commodity must be (i) portable (ii)durable (iii) suitable for sampling, grading and exact description and (iv) such as it supply can be increase such commodities are
wheat, gold, government security etc.Bulky articles like brick and perishable articles like fresh fruit and vegetable have a narrow market.

2.Native of demand .A commodity which is universal demand e.g. gold & silver will have a write market similarly, a commodity of general consumption has a wide market.

3..Means of transport and communication.The size of the market depends upon the extent to which means of communication and transport have been developed. A properly developed transport and
communication system has enabled commodities be carried long distances and establish wide contacts. The has widened the market.

4.Peace and security.Obviously, goods cannot marketed in didn’t places unless peace and order prevail in war-time, due to insecurity in war zones, markets get restricted. This extent of the market
depends on the peace prevailing in the region.

5.Currency and credit system.If the currency and credit system of the country are well developed marketing can be conveniently and profitably carried on over extensive areas. The extent of the market
depends on the state of the currency and the confidence it inspires.

    6.Policy of the state.Market may be restricted by the policy of the state. Prohibitive duties and quotas restrict the market. The zoning system eg: wheat zones, which allow free movements of goods only
within a certain zone has the same effect. Thus the government policy can also affect the extent of the market.

7.Degree of division of labour.We know that division of labour is limited by the extent of the market. The converse of this is also true. That is the extent of the market also in its turn depend upon the
degree of division of labor the cheaper the articles and wider the market.

          FUNCTIONS OF MARKETS

          There are several ways of classification of markets. Some of these types are

          A.Classification of market according to what a bought and sold

1.Product market: Deals with selling and buying of final goods eg:markets of sugar, rice beans, etc

         2.Factor market: Deals with buying and selling of factors of prod in.e.g labor market,capital market, market for land

         3.Financial market: Deals with selling and buying (exchange) of currencies.

             The currencies are being sold and bought. Eg. Market for foreign currency in Bureau de change.  

B.Classification of market according to the place where the product is bought and sold

1. Local market: This occurs when any commodity is produced and sold on local basic eg local brew like “mbege” is sold around the areas = of its production.
2. National market: It occurs when any commodity is bought & sold in the whole country. Eg. a commodity which faces a national market is soap found thought Tanzania.
3. International market: It occurs when a commodity is bought & sold in many countries of the world eg. medicines fetch international market.

 

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C.Classification of market according to commodity.

1. General market

 

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This type of market occurs when various commodities are bought & sold at any specific area.Eg we can say Kariakoo is a general market.

1. Specific market:

 

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It occurs when only: It occurs which only one kind of commodity is being bought & sold at any specific area. Eg.Dar es salaam stock exchange (DSE) where shares are only bought and sold.

1. Grading market

 

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This is type of market which occurs which any commodity is sold & bought according to its grade.

D.Classification of markets according to future

1. Day to day market:

 

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This type of market occurs when the price of any commodity is determined according to demand and supply condition on any particular day.

1. Short period market:

 

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It occurs when the price of any commodity is determines according to demand conditions of that short period. In the short period the firm can any the variable inputs like labor, rim, etc.in this case, the supply can’t be increased beyond the existing capacity of the present firms.

1. Long period market:

 

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This kind of market occurs when the price of any commodity is determined according to the long run demand & supply conditions. In the long run period it is to change the amounts of any factors of production such as establishing new firms, construct building etc.

 E.Classification of market according to situation & structure of market.

     Market is based on the buyers and seller (degrees, types of commodities which differentiated, and if there are some barrier. Based on this classification market

 Types:-

• Perfect market
• Imperfect market

 

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Perfect market.

A market issued to be perfect when all the potential seller and buyer are promptly, aware of the price to which transactions take place.This market structure is character by the following.

1. Large numbers of buyers and sellers.

 

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Under this there is a large number of seller & buyers of commodity in the market and therefore a buyer or seller cannot influence anything in the market for example the price and the output.

      2.Homogeneous Products.

The commodity produced by all firms is totally identical in all aspects therefore a buyer has no specific preference to buy from a particular seller.

      3.Free entry and exist.

Any new firm is free to join the market and any already existing firm to leave the market.

      4.Perfect knowledge.

All seller and buyer have full knowledge about the market condition for example the price.

       5.Perfect mobility of factors of production.

Factors of production such as labor and capital are perfect mobile both geographically and occupationally. Mobility of factors of production is essential to enable firms and the industry to achieve an equilibrium position.

        6.Profit and utility maximization.

The major goal of a firm is to maximize profit and that of the buyer to maximize utility.

        7.No transportation cost.

Under this market structure is also assumed that there is no transport cost for example in the movement of goal, r.m and so on. If cost of transport is to be there, the prices must differ to that existing in different sector of the market.