How are markets defined?

Published on June 29, 2023   5 min
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Hello, and welcome to this session on how markets are defined. My name is Annmarie Hanlon and I teach Marketing at Cranfield University School of Management in the UK. Let's get started.
In this session, we start by understanding the market and then we examine the types of market which exist. Then we take a practical example to show how to define the market on a step-by-step basis.
Before defining your market, you need to understand your market as this enables you to understand the size of the market and whether it represents an opportunity and to evaluate market share held by your organization as well as your competitors. From this, you can assess competitors in the market and then identify opportunities for growth. When you understand your market, you can create a strategy so that your customers understand your offer.
As an example, Toddle is an incredible brand. The founder of Toddle couldn't find products that would protect her baby's skin and developed a special hand gel for babies. But the question is whether this is in the baby care market, the skincare market, the healthcare market, or perhaps all three, greater clarity about your market makes implementation of your marketing mix, much easier.
There are many types of markets, including consumer, which focuses on personal purchases by individuals. Industrial, which mainly considers items used to make other products, such as buying steel to manufacture vehicles. B2B, which has an abbreviation for business to business. This involves items used in the course of another business, such as one business buying computer equipment from another business. Not-for-profit, which is also known as the charity or third sector, and is about purchases made by organizations such as charities, trade unions, or associations. Government is also a market type, as there are many purchases made by government at different levels, from central and local governments to health services, schools, libraries, armed forces, and police services. Another market type is the reseller market, where goods are purchased to be sold on. A computer company may buy software licenses from businesses such as Microsoft to sell on to other businesses. When we consider a broader category, overseas as a market type which covers all of these categories, but in other countries. Finally, many larger organizations have an internal market where they provide goods or services for other divisions, subsidiaries or employees within their own organization.