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uk

Types of Market

BTEC Business

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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

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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

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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

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New Ideas for Selling to

Consumers
Alternatives to conventional
retailing:
• Mail order (including catalogue
shopping)
• Online, Web-based selling
(‘e-tailing’)
• Direct producer-to-consumer
selling

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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

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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/glossary.htm

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What’s Traded on Commodity

Markets?
Goods traded on commodity
markets include:
• coffee
• cocoa
• oil
• precious metals
• diamonds

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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)

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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

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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

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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/current/argument/arg
10-2.htm
• ‘Derivatives’ markets

Copyright 2007 – Biz/ed