A market is any place or system where buyers and sellers come together to buy and sell goods or services. It could be a physical location (such as a town market) or an electronic/online system where exchange takes place. When a buyer and a seller meet and a transfer of ownership of goods or services happens in exchange for money, a market situation has occurred.

The following features are necessary for a market to exist:

1. There must be at least one buyer.


2. There must be at least one seller.


3. There must be goods or services which are bought or sold.


4. There must be a medium of exchange (for example, money) to enable payment.


5. There must be a place or system where the buyer and seller meet (this may be physical or digital).


6. There must be the determination of price (the buyer and seller agree on price).


7. There should be freedom of entry and exit — new buyers and sellers should be able to join or leave the market without undue barriers.

There are several types of markets, which can be classified in different ways. Some important types include:

1 Commodity Market

This is the market for buying and selling raw materials, semi-finished items and finished goods. Examples include agricultural produce, timber, fish, furniture, and clothes. It may take the form of open-air markets, shops, or stalls.

2 Money Market

This is a financial market where short-term funds (money) are borrowed and lent, often between banks or financial institutions. It is not usually open to the general consumer directly.

3 Capital Market

This is a market for longer-term funds and for trading financial assets like stocks, shares, and bonds. It supplies capital to firms and governments. At the JSS level, focus is mainly on commodity and simple markets.

4 Retail Market / Wholesale Market

Markets may also be classified by the kind of trade:

1. Wholesale Market: Goods are bought in bulk from producers and sold in smaller quantities to retailers.


2. Retail Market: Goods are sold in small quantities directly to the final consumer.

Marketing refers to all activities that businesses engage in to promote, sell, and distribute their goods or services to customers. It includes identifying customer needs, producing goods/services to satisfy them, pricing appropriately, making products available at convenient places, and communicating their value. Marketing activities are the specific tasks done to carry out marketing, including market research, product design, pricing, promotion, distribution, after-sales service, and customer relationship management.

1. Market Research: Gathering information about consumer needs, preferences, competitors, and overall market conditions to decide what product or service to offer.


2. Product/Service Design and Development: Developing goods or services with features, quality, packaging, and branding that appeal to the target market.


3. Pricing: Deciding how much customers will pay, ensuring it covers costs, allows profit, and is acceptable to customers.


4. Promotion: Informing, persuading, and reminding customers about goods/services. Includes advertising, sales promotion, personal selling, PR, direct and digital marketing.


5. Distribution (Place): Making the product available at the right place and time, choosing channels, transport, warehousing, and inventory management.


6. After-Sales Service and Customer Relationship: Providing services after purchase like repairs, warranties, and support to maintain satisfaction and loyalty.


7. Market Segmentation and Targeting: Identifying customer groups with similar needs and tailoring the marketing mix for the selected target market.


8. Branding and Packaging: Developing a brand and attractive packaging to distinguish the product and create a favorable customer image.

Market and marketing activities help by:

1. Ensuring goods reach those who need them.


2. Giving consumers access to a wide range of goods and services.


3. Helping businesses understand and satisfy customer needs, increasing sales and profit.


4. Allocating resources efficiently, moving goods where there is demand.


5. Promoting competition, improving quality, and lowering prices.


6. Creating employment in production, marketing, distribution, sales, and advertising.


7. Helping the economy grow through circulation of goods, services, and money.


8. Building a good image and long-term relationship with customers.

1. Consumer demand: What customers want, how much, and when.


2. Competition: Other firms offering similar goods or services.


3. Cost of production: Influences price and profitability.


4. Technology: Affects production, distribution, and promotion (e-commerce, digital marketing).


5. Government policies: Laws, taxes, trade regulations, consumer protection.


6. Economic environment: Income levels, purchasing power, inflation, employment.


7. Social and cultural factors: Customs, traditions, values, lifestyles.


8. Physical environment: Infrastructure like roads, power, and communication.

A career in the capital market involves working in financial markets where long-term funds are raised and invested. Some careers include:

1. Stockbroker or securities dealer: Helps clients buy and sell shares and other securities.


2. Investment banker or issuing house agent: Assists companies to issue new shares or bonds to the public.


3. Portfolio manager or fund manager: Manages investors’ money by selecting which shares or bonds to hold.


4. Market analyst or financial researcher: Studies companies and markets and advises on investments.


5. Registrar or transfer agent: Keeps records of share ownership and updates transactions.


6. Capital-market regulator or compliance officer: Ensures market rules are followed and fair practices maintained.

These careers require knowledge of finance, analytical skills, honesty, and often further education.

Institutions

Some key institutions include:

1. Regulatory body (e.g., Securities and Exchange Commission, Nigeria): Sets rules and supervises the market.


2. Stock/exchange markets (e.g., Nigerian Exchange Group): Places where shares and long-term securities are bought and sold.


3. Issuing houses/merchant banks: Help firms issue new securities.


4. Clearing and settlement system (e.g., Central Securities Clearing System Plc.): Ensures transactions are completed reliably.

These are long-term financial products:

1. Shares / Stocks (equity): Represent ownership in a company.


2. Bonds / Debentures: Long-term debt where investors lend money to governments or companies and earn interest.


3. Treasury Bills: Sometimes part of the money market, but can be considered longer-term securities.


4. Derivatives (options, futures, rights): Contracts whose value depends on other securities.

Meaning (by Cash and by Credit)

Cash transaction: Buyer pays immediately in money when goods or services are supplied; ownership transfers immediately.

Credit transaction: Buyer receives goods or services now but pays later (or in instalments); ownership or final settlement may occur later.

Transactions

A transaction is any business activity where goods, services, or securities change hands, often involving payment. Examples include purchase of goods for cash or credit and sale of shares in the capital market.

Cost of Sales

The cost of sales (or cost of goods sold) is the direct cost involved in making or buying the goods sold during a period. It includes purchase cost, direct labour, materials, etc.

Formula: Cost of Sales = Opening Stock + Purchases – Closing Stock

Mark-up

Mark-up is the amount added to the cost price of goods to determine the selling price. Expressed as a percentage of cost.

Example: If cost is ₦1,000 and the mark-up is 20%, selling price = ₦1,000 + (20% of ₦1,000) = ₦1,200.

Turnover

Turnover is the total sales made by a business in a period; essentially, the total revenue from sales before deducting costs and expenses.

Profit & Loss

Profit: When total revenue (sales) is greater than total costs and expenses.

Loss: When total costs and expenses exceed total revenue.

A profit-and-loss account shows revenue, subtracts cost of sales and expenses, and provides the net profit or loss.

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Summary

In summary, a market is where exchange of goods and services takes place. Marketing activities are tasks that help businesses bring products to customers and satisfy them. Understanding market and marketing ensures businesses succeed and compete effectively.

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Practice Questions

1. Define the term market and list four features of a market.


2. Explain three types of markets and give one example for each.


3. What is marketing? Describe four marketing activities.


4. Why is market research important in marketing?


5. Outline five factors that influence marketing activities in a business.


6. How does distribution help in marketing a product?


7. Explain how branding and packaging contribute to marketing.


8. Describe how government policy can affect marketing activities.


9. How do marketing activities help improve a nation’s economy?


10. Draw a simple table showing differences between wholesale and retail markets.