What is the correlation between business and market

Some businesses specialize in production. It is their handwork. They source raw materials and transform them into finished products. Such businesses are many. Each item we use today comes from a different manufacturer. There are in every country different producers. In Nigeria alone, there are more than a thousand businesses involved in production. Onitsha is a city in Nigeria, that is very very industrialized. The businesses in that city alone that have as their niche production, numbers more than 500. Each product is synonymous with the company that produces them. 

When those companies finishes producing the items, have you ever wondered what they do with them?

Production is done in excess, the number of products that stems from them are usually excess. They cannot engage in mass production to produce so much products and keep it to themselves. 

Some companies produce millions of their brand products, monthly. All the personnel's in any company put together does not usually reach very very much amount. Even if they were to share the produced items theirselves, they cannot finish consuming them, especially if it is perishable or non-durable.

Sharing it with staffs is even an impossibility. Because capital was used to produce those items. If they dedicate them to charity, how could they earn the money which they would use to produce products next time?

Businesses that engage in production usually indicate profit as their objective. Their desire is to sell those items to whoever is willing to buy them. There are usually targets for each particular product- those it would appeal to. If they could exchange it with them for money, they would make profit. 

But how could they? They could sell it to whoever comes to their companies to buy. The companies of a place usually distinguishes it. Anyone who knows where a company is located can go there and buy from them. 

But however there is a special place where producers sell their products. It is called market. By definition it is the place where the producers sell their goods. But they usually do not go to the markets theirselves, those who buy in bulk from them, take it to the various markets for sell. Those who are desiring to buy go to those markets to purchase. They do not receive it for free. Purchase is done in a market with money. Those who buy it from the companies attach an additional amount to the cost they purchase it, then when they deduct their original costs, what is usually left over is their gain for a particular product. So our definition is not complete if we do not say that it is a place where you would buy products, that are sold, if we only say that it is a place where products are sold. 

Markets have come to be synonymous with trading. When we hear the word market, the picture that comes to mind is a place filled with products. And we may even imagine people making their selection from the various galleries and shops within a market.

The transfer of ownership of products takes place between the seller and the consumers. The sellers, avail their products in the market, while consumers purchase them, from them. 

All the entities considered markets, are in summary avenues for trading. So what then in summary is the relationship between market and trading? Market is where one of the activities or operations of a business, which is trading occurs. Wherever you see products being kept for sell and people usually go there to buy, call that place a market.

A market conventionally is a gathering of different sellers with different products for sell. It simply means that not only a certain product is sold in a market. Many products from different companies by different traders are usually brought there for sell. Whoever goes there would make a list of the items he wants. 

 Some kinds of markets specializes only in the sell of similar products e.g technology.  Some, deals with different items that are not related. Some may sell only a particular product made by a particular company. 

Markets may assume many forms, including  physical places that can be accessed physically a shopping mall, supermarkets, grocery stores,  virtual spaces such as an online marketplace and  stock exchange.

For something to be considered a market, it must fulfil two requirements

a. It must contain items, weather of only a certain brand or many different companies for sell

b. Trading must be in operation in that place; that is to say, buying and selling of items must be done there.

What distinguishes the company from the market is that production occurs in the company while selling and buying occurs in the market.

Markets are not something that is uniform. They are of types. There are four categories of markets.

      1. PERFECT COMPETITION 

It is the kind of market where there are many traders, that sell and buy products that are identical or very related. It is marked by high level of transparency and low barriers to entry and exit.

    2. MONOPOLISTIC COMPETITION 

It is a kind of market in which there are many traders. But it is distinguished by the product they deal with, in that, they are not closely identical as in perfect competition. This type of market is distinguished by low barriers to entry and exit and price competition.

          3. OLIGOPOLY MARKET 

It is a market structure with a small number of firms, in which none can subside the sovereignty of the other.

          4. MONOPOLY MARKET 

It is a kind of market in which one firm has autonomous sovereignty over trading, because the item they deal with has no substitute. The firms are usually at liberty to set prizes Such a firm has no competition.