Markets exist because of the clients – it’s a simple as that. Without clients who seek services or products, there will not be markets catering to them. But what is a market, per se, and why is it necessary to maintain a healthy working relationship between the two?
Market and Client Defined
There is, of course, a difference between the market place and the market itself. Whereas one is a physical structure where merchandises and services are being peddled, a market is an intangible form of social structure for the exchange of rights. This enables people, firms and products to be evaluated and priced.
The term “client” refers to the entity involved with one kind of transaction of the said market. In effect, there are only two transacting roles possible in a marketing scheme: the buyer’s role and the seller’s. Clients can be a singular person or a group of people, an organization, a company or basically any entity, living or otherwise, past or present, who use(s) the professional services of another. The more popular terms for the buyer’s role are “customer,” “client,” “consumer,” “patron,” “clientele,” “shopper,” etc.; and the seller’s role are “merchant,” “vendor,” “retailer,” “wholesaler,” “supplier,” “trader,” “broker,” “peddler,” “hawker”, etc.
The type of services or products that the clients need or want at the moment dictate what types of market should exist. There is the supermarket scheme where the merchant periodically change prices for classes of goods in response to market conditions. The markets of yesteryears used to rely on merchants negotiating the price of each merchandise or service with each client. This traditional type of “marketing” can still be clearly seen in any flea market around the world, and thereby popularly known as the flea market scheme.
Other types of market can perform like an auction, like any complex institution as with stock brokering, like a shopping center, or any sort of business transaction, verbal or written, between two individuals. There is also the term “free market trade.”
In economics, a free market is when governments do not make any attempt to intervene with business transactions by imposing minimum wages, price ceiling, subsidies, taxes, etc.
Maintaining A Healthy Relationship Between Market and Client
Why is it important to maintain a healthy working relationship between market and client then? Market prices, you see, can be distorted by the merchants who have monopoly over a product or service. On the other end of the spectrum, clients who have monopsony power over the market can likewise affect the rising or lowering of prices.
Monopsony, in economics is a market form wherein there is only one buyer in a particular market; as opposed to monopoly where there is only one seller for a multitude of buyers. A person or company practicing the monopsony type of marketing scheme is called a monopsonist. Both monopoly and monopsony are examples of imperfect competition. They bring about unfair forms of setting product and service prices.
It is for that reason why it is important to maintain a healthy working relationship between Market and Client – to bring prices down to the fairest possible levels and to help markets expand, clients to multiply and for products and services to progress better, faster, but cheaper.
Kanati Inc. |
Added: Thu Dec 20, 2007 7:26 pm GMT 