13. Market, Its Functions and Classification (Notes of Business Communication and Report Writing)

13. Market
The word ‘Market’ is derived from the Latin word ‘Mercatus’ which means market, goods, traffic or trade. In popular usage, the ‘Market’ is a place where we go to buy or sell commodities. But in Economics the market does not mean a particular place or bazaar, it merely means a commodity and a group of competing buyers and sellers of the same who are in the competition with one another. We can say that market is indeed a contact between a buyer and seller. Today, buying and selling can be done even at home, we can say that the whole world is a market.
Functions of a market
The functions of a market are following.
1. Fixation of Price: One of the main functions of a market is price determination.
2. Transference of goods and Services:  A market also does the function of transference of goods and provides services from the producers to the customers.
3. Availability of Place, Time and Possession: Market creates place, time and possession utilities.
a. Place Utility: Place utility is created where goods and services are available and they are provided to the consumers at those places.
b. Time Utility: A market creates time utility to the consumers also. The time of a consumer is saved when he visits a market. He may get all types of things at one place. In this way, his time is saved.
c. Possession Utility: A market also makes it easy to transfer the goods of a producer or a seller to a consumer.
4. Easy Transaction of a Product: Every market functions through brokers, agents and dealers. They make the transaction of a certain product easy.
5. Promotion of the Business: A market is the best available source to promote the business because so many brokers, agents and dealers meet. They play an important part in promoting business.
Classification of Market
Markets are classified as,
1.      Commodity Markets
2.      Capital Markets
1. Commodity Markets: Raw materials or manufactured products may be called ‘Commodities.’ Every commodity has a different method of its sale depending upon its nature. Different commodities have different methods of delivery.
a. Spot Ready: The delivery of the goods on the day of sale is called ‘Spot Ready.’
b. Forward or Future: If the delivery of goods is postponed to some date, the transaction is called ‘Forward or Future.’
c. Ex Ship: If a buyer takes the delivery of the goods at the dock but after paying all charges, it is called ‘Ex Ship.’
d. Ex Factory: The delivery made at the godown or factory of the seller is called ‘Ex Factory.
Kinds of Commodity Market
The commodity market may be sub-divided into three kinds. 
a. Produce Exchange Market: In these markets, the business of raw products both in mineral and agricultural is done. Karachi Exchange Market is the best example of it.
b. Manufactured Goods Market: In these markets, the business of semi-manufactured or fully finished goods is done.
c. The Bullion Markets: These markets do the business of gold, silver and diamond.
2. Capital Markets:
In such markets, the transactions related to wealth take place. These transactions are done in the form of money, bills, shares, securities and other stocks are carried out. Through capital market, the extra money of the people is saved. This extra money is lent to big traders and industrialists. The capital market is sub-divided into three kinds.
a. Money Market: These markets do the function of short term loans. These markets operate with the public savings. These markets deal with private individuals.
b. Foreign Exchange Markets: As the name suggests, these markets deal in foreign exchange. They buy and sell foreign currencies at local level. The people can buy a currency of any foreign country from these markets.
c. Stock Exchange Markets: These markets deal in the matters related to the sales and purchases of shares and securities. These markets are the index of the country’s economic growth.
12. Market Reports
Question No. 12: What is a ‘Market Report?’ Discuss its qualities, types and advantages? Also discuss the necessary elements of a market report.
Answer:                                                         Market Reports
“A market report is the publication of records of business transaction over a specified period.”
The modern markets want to make its customers aware about the condition of the market. They want to inform their customers about the prices of different commodities and the volume of business. That’s why, they publish reports from time to time about the rise and fall of business. Such reports are called ‘Market Reports.’
Characteristics of a Good Market Report
a. Impersonal: A market report must be impersonal. It should have the writer’s personal views. There should be no liking or disliking of the writer.
b. Clarity: A market report must be clear in every respect. The writer should avoid the ideas which may confuse anybody. He should use simple words.
c. Use of technical words: Technical terms should be used in technical terms. Commercial vocabulary must be used.
d. Conciseness: A market report should be brief. But, it does not mean that the writer should miss the important details.
e. Completeness: A market report must be complete in each respect. It should have all the figures and facts.
f. Logical Consistency: A market report must have logical consistency. Everything in the market report should have sequence.
g. Analytical: A market report must be analytical in its nature. It should analyze the factors which are responsible for the rise and fall of prices of the things in the market.
h. Conclusion: A writer of the report must draw right and correct decisions on the basis of the matter given in a report.  
Essentials of a Market Report
            Following are the essentials of a market report.
1.      The first essential of a market report is ‘Date of business transaction.’
2.      The second essential of a market report is ‘Place of business transaction.’
3.      The period for which a report is made should also be the part of a market report.
4.      The types, qualities and quantities of commodities should clearly be mentioned.
5.      Position of demand and supply of things at the time of report is also part and parcel of a market report.
6.      The volume of business transacted and opening and closing prices of the stocks transacted should be the part of a market report.
7.      Factors influencing a market and mode of payment are an essential part of a market report.
8.      Terms and conditions of delivery, the commercial atmosphere and any relevant diagram should be included in the report.
Types of a Market Report
            The kinds of market report are following.
a. Daily Market Report: These reports are published in daily newspapers. Their purpose is to inform the reader about the prices, rates and demands of certain goods. They include the following points.
1.Opening rates and the highest rates of the day.
2.The closing rates and the highest and the lowest rates.
b. Weekly Market Reports: They throw light on the business activities being conducted through out week. They inform the reader about the closing rates of the last week. They indicate the change in price level. That’s why, they are very fruitful for heavy business transactions.
c. Monthly Market Report: They throw light on the business activities being conducted through out the last month. In these report, technical aspects of business are discussed. They give us a complete review of the supply and demand of goods.
d. Annual Reports:These reports are analytical reports. They take an analytical view of business conditions prevailing during the previous year. These reports help the government in making budget.
The Scope and Importance of Market Reports
            The market reports play an important in the progress of business. Following are the important aspects of the information given by a market report.
1.      Decision Making:
They help a business man in making decisions about their business.
2.      Economic Details:
They show the decline and development in the economic condition of a country. 
3.      Stability of Prices:
They tend to stabilize the prices in the market.
4.      Guideline for the Investors:
Market reports are the best guideline for the businessmen. They are better able to analyze the market and invest in the business.
5.      Comparative Study:
The market reports enable the reader in making a comparison of price of the same commodity prevailing in different markets.
6. Factual Information:
The market reports provide factual information about a given market on a given day.
7. Price Indicator:
They indicate the movement of prices of different goods. They also determine the buying and selling rates of the market.
8. Introduction to Commercial Technology:
The market reports introduce new methods of commercial technology which helps the industrialists and higher business executives in adopting updated techniques to promote their business.
9.      Source of Advertisement:
The market reports serve as medium of advertisement of goods.
            Conclusion: To sum up, market reports promote business culture and commercial awareness and bring prosperity to the businessmen.