Critical Definitions in Marketing Market and Industry

Critical Definitions in Marketing:  Market and Industry

There are words we use in everyday language, and then there are the same words we use in a marketing context.  We need to be much more precise as marketers than we do when we are talking to friends and family.  So let’s take a look at these in our business context.  Here’s the first few we need to think about:

What is a market?  We use this word often.  We might think of the local store as a market.  Often, even in many professional publications, the use of the word market is used to define the dollar size (or should I say “total revenue”) of what is sold in a given classification of goods, such as computers, automobiles, office furniture, or defense spending.  However, this is not correct.  Here is a good definition of a market:

“The market consists of all prospective customers for a given product, service, or idea. Customers can be purchasers who intend to resell the product or end users who intend to use or consume the product. The market can be categorized into separate groups called segments. When a producer appeals to a market or market segment, the producer must take into account the distinction between the end user or consumer and the purchaser or decision maker(s). This is especially true in B2B models. The market may be individuals or organizations who are able to purchase the organization’s product. Each entity in the delivery chain will have different needs, so a complete market needs analysis must include all potential segments and all entities within each segment.” (Principles of Marketing, n.d.)

Notice that this definition includes the word “customers.”  That is the key word here.  A market is simply, and only, those you sell to.  So what do we call it when we are talking about that other market, the one where we talk about total revenue for a category of goods?  Well, it isn’t a market after all.  It is an industry.

An industry is made up of all the competitors and the suppliers. Stated another way, “industries are broad groups of businesses or organizations with similar activities, products, or services” (O*Net, n.d., p.1).  So, for instance, in furniture manufacturing, you might think of Steelcase, Ashley Furniture, and Masterbrand Cabinets.  These companies, and more, are all part of the furniture manufacturing industry.

This is simply part one of the definitions of key vocabulary and critical definitions in marketing.  More to come!

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