The concepts pertaining to market can be classified as follows:
- Traditional Concept of Market/ Traditional Markets: American Market Association defines the traditional concept of market as, “At every point where a specific commodity is concentrated for sale, a market is found”. This concept of market was prevalent in the 'pre-industrial revolution' era which was characterised by an agriculture-cum-handicraft economy, with no elaborate distribution system. The agriculturist, whether he produced corn or cotton, meat or butter disposed of the surplus in his immediate neighbourhood. Because of this tendency, traditional concept focuses that market means 'a place' only, where actual buying and selling takes place. The traditional concept of market lays emphasis on the following:
- Place: The goods available for sale are brought to a specific place and the buyers of those goods reach those places for buying them.
- Different markets for different commodities: The traditional concept identifies different markets for different commodities. e.g. in a vegetable market, vegetables are bought and sold; in a foodgrain market, various foodgrains such as rice, wheat, lentils, etc., are bought and sold.
- Scientific Concept of Market: According to Cournot, "The term ‘market' is not any particular place in which things are bought and sold but the whole of any region where buyers and sellers are in such free intercourse with one another that the price of the same goods tends to equality easily and quickly”. This concept of market widens the area of market by advocating that:
- Market is not restricted to a particular place, but to a region and the whole region is taken as a place of market.
- The buyers and sellers of the whole region have free access to one another.
- This accessibility enables the market forces of demand and supply to operate and helps in determining the market price.
This concept of market was prevalent after the World War II, especially in the fifties and sixties when the size and character of the markets changed due to the intensification of industrial activity in terms of:
- Quantity,
- Quality,
- Variety of the products;
- Competition,
- Awareness on the part of consumers;
- Emergence of laws and enactments to protect consumer's interest.
- Modern Concept of Market/ Modernised Markets: According to Clark and Clark, “In fact, for most commodities, the market must not be thought as a geographical meeting place, but as any getting together of buyers and sellers in person by mail, telephone, telegraph or by any other means of communication”.
According to Peter Drucker, "The purpose of the business is to create customers and customers do not have geographical boundaries”. So, by keeping the above two definitions in mind, this concept of market can be summarised as, “A market is the atmosphere of a region in which the forces of demand and supply operate directly or by means of any kind of communication that are sufficient to bring about transfer in the title of the goods and it does not necessarily mean only a place where actual buying and selling is conducted”.
- Emerging Concept of Market/ E-commerce: According to Dyddy, “Markets are people with money to spend and desire to spend it”. This concept of market is prevalent now-a-days and the reason of its evolution could be traced to the changes in modern business in terms of:
- Organisation,
- Ways of working to Demento;
- Use of technology,
- Perspectives, scope and outlook.
So, it can be safely concluded that this concept of market follows the adage ‘market means people'.
This concept of market is also referred to as “people oriented concept as it totally ignores the place of activity".