4.1 WHAT IS A MARKETPLACE? Sure I had read technical books, deciphered journal a

Question

4.1 WHAT IS A MARKETPLACE? Sure I had read technical books, deciphered journal articles, and analyzed supply and demand with fancy mathematical models, but I also learned about markets the hard way. I once attended a trade show and stood in a booth trying to sell a product. As the day began, I felt proud to represent the firm which offered state-of-the art software and training to highly competent business professionals. But, as the day began to pass, so did potential customers who walked freely by the booth. What was the problem? I thought our product would sell itself. Was the price too high? Was the product quality too low? Did competitors offer a better value to potential customers? The certain message I received that day was clear. Suppliers succeed by understanding consumer demand. That day, we did not.

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What you need to do is insert specific statements on principles that are covered in this chapter 4.1. The chapter titles are questions, but this assignment does not involve answering the entire title question. Instead it involves presenting one principle that is learned in a section. Together, with many postings over different sections by various students, the principles within each section of the chapters are flushed-out.

Explanation / Answer

Market is place to exchange goods and services where buyer and seller meets. Now market is more like a process than a place. In these days most of the transactions are easily made electronically or over the web.

For the market to be effeicient there are too many factors are involved such as low transaction cost, legal autthority but primary factors are supply and demand. The product or service should have demand and for this demand there should be adequate supply. Although there could be mismatch in the quantity demanded and suppplied but in the efficient market price adjustment will achieve the equillibrium.

French economist Say has dveloped a theory which states that supply creates its own demand. However, in 'Great Depression' there was no demand in the economy and its spiralling effect pushed the world in extreme recession. Legendary John Keynes then corrected the theory by saying that demand creates its own supply.

Cosnumer demand and sentiments are very much important in the market. For example, currently almost every mobile in the market has 5 inch screen or above that. First company to introduce 5 inch screen mobile was Dell and it has model 'Streak' in the market when dominant segment was of 3.5 to 4 inch screen. However, that model failed drastically and Dell even exited from the mobile segment. There could be lot of discussion on the Dell's strategy but one point is that there was no demand for such type at least at that time.

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