Market is a term defined in many ways, comprising:

But a more accurate definition states that the market is a real or abstract space where supply and demand interact and buy or sell goods, services or financial instruments, directly or through intermediaries.

Basically, all markets consist of people.

The market of a specific product is made up of existing and potential customers who are interested in the item, have the ability and resources to acquire it.

There are several categories when describing the market of a product. The most general of them is the population and it's followed by the population interested in buying the product that forms the potential market. But resources are very important, more important than simple intention, so a more narrow category is the available market, that consists of potential market who also have resources to acquire the product.

The group of available market that the company has focused on to promote their product is the target market. The part of this market that actually buys the item forms the penetrated market, the result of all marketing efforts. The link between these categories in better illustrated in the following image:

Market Segmentation

The importance of the market consists in its functions in the economic environment.

  1. The market assures the continuous contact between the producer and the consumer, and by this it accomplishes the efficient assignation and use of economic resources. It also determines the decisions concerning production, allocation, consumption, trade.

  2. The market has a self - adjusting mechanisms, independently setting its proportions and balance needed for its activity. It has developed many levers that operate in a complex deployment(price, demand, profit, competition)

  3. The market assures the long term balance and, mainly, the balance between supply and demand, achieving the change of individual interests in the best choice for society - the best usage of resources available at a certain moment.

  4. The market allows products and services to be evaluated and priced through a confrontation between supply and demand.

For all these functions to be accomplished, the market needs certain premises:

The market has a dynamic character, features concerning its size, structure and location vary.