U1.11 — The Concepts of Market and Marketing
Overview
Dotpoint 11: The Concepts of Market and Marketing
Every business needs to identify who its customers are and decide how it will attract and satisfy them.
This dotpoint introduces two closely related concepts:
- Market
- Marketing
A market is the group of buyers and sellers involved in exchanging goods or services, while marketing is the activities a business uses to understand customers, promote its products and encourage sales.
A simple way to remember the difference is:
Market = the customers a business wants to reach.
Marketing = what the business does to reach and satisfy them.
What is a Market?
A market is where buyers and sellers come together to buy and sell goods or services.
It does not have to be a physical location - it can be physical, such as a shop or café, or virtual, such as an online store or auction site.
Essentially, whenever consumers and producers are engaging in transactions, a market exists.
Different ways a market can exist
Physical Markets
Physical markets are real-world places where buyers and sellers interact face-to-face. These can be formal, structured markets, such as shopping centres, or informal markets, such as swap meets.
Retail Shopping Centres
Retail shopping centres operate as conglomerate markets, where many different types of businesses sell a wide range of unrelated products in the same location and compete for the same customers.
These centres bring together supermarkets, fashion retailers, electronics stores, homewares, beauty services and entertainment under one roof, creating a multi-business marketplace.
WA examples include:
- Karrinyup Shopping Centre
- Westfield Carousel (Cannington)
- Lakeside Joondalup
- Perth CBD retail strip (Murray & Hay Street Malls)
Food & Produce Markets
- Mt Claremont Farmers’ Market - local growers selling fresh WA produce
- Fremantle Markets - fresh food + crafts + art
- Subiaco Farmers Market - community-based fresh produce
These markets involve direct producer-to-customer exchange.
Vehicle Markets
- Melville Automotive Precinct (Leach Highway “Motoring Mile”)
- Car yards in Osborne Park
These are examples of cluster markets, where similar businesses group together so customers can compare options easily.
Property Market
The Perth property market is another major physical market, where buyers and sellers exchange homes and land through inspections, auctions and real estate agencies. It is one of Perth’s biggest markets because thousands of properties are bought and sold each year, involving large amounts of money, finance providers and professional services such as agents, conveyancers and builders.
Online Markets
These are platforms where buying and selling happen online. Online markets have grown rapidly over the past decade as more consumers have become comfortable shopping, comparing products and making transactions digitally.
In WA, people commonly use:
- Gumtree Perth: second-hand goods, cars, jobs and rental listings.
- Facebook Marketplace: local buying and selling across Perth and regional WA.
- eBay Australia: allows WA buyers and sellers to trade nationally and internationally.
- Amazon Australia: allows consumers to purchase a wide range of new products online.
- ASX: an online market where investors buy and sell shares in listed companies.
The market in these examples is not a location - it is the network of buyers and sellers connected through an online platform.
Market as a Group of Customers
In business, we often use market to mean the group of potential customers for a product. For instance, the market for vegan foods in Australia refers to all consumers who might buy plant-based products.
This can be a mass market, which is a very large group, such as all soft-drink consumers, or a niche market, which is a smaller specialised group, such as consumers of sugar-free organic kombucha.
Example of how to write this in an exam
A market is where buyers and sellers come together to exchange goods or services. It may be a physical location, such as Karrinyup Shopping Centre, an online platform such as Amazon Australia, or a group of potential customers, such as consumers in the Australian soft-drink market. Therefore, a market does not have to refer to one physical place; it can also describe the customers and trading environment in which exchanges occur.
What is Marketing?
Marketing is the process of planning and executing activities such as setting the right price, promoting the product and distributing it to the right places in order to satisfy customer needs and achieve the business’s goals.
If the market is who and where the buying happens, then marketing is how businesses connect with that market and persuade consumers to choose their product or service.
In other words, marketing is everything a business does to attract and retain customers in its market.
Dotpoints 13-21 explore the concept of marketing in much more detail, including the specific strategies businesses use to understand, target and reach customers.
JB Hi-Fi example
JB Hi-Fi uses bold signage, in-store promotions, catalogues and online advertising to draw customers into its stores and website. These activities are examples of marketing because they are designed to attract customers and encourage sales.
Example of how to write this in an exam
Marketing is the process of planning and carrying out activities that help a business satisfy customer needs and achieve its goals. For example, JB Hi-Fi uses in-store promotions, catalogues, bold signage and online advertising to attract customers. These marketing activities help the business communicate with its target market, encourage purchases and retain customers.
Market vs Marketing: Key Differences
The easiest way to remember the difference
Market = Who / Where
The market is the group of potential buyers or the arena in which buying and selling happen. It can be a location, online platform or category of customers.
Marketing = How
Marketing is what businesses do to connect with that group, attract customers, satisfy their needs and encourage sales.
Smartphone example
The Australian smartphone market includes people interested in buying smartphones and the places or platforms where they buy them. Marketing includes the advertising campaigns, social media, pricing, product design and customer-service activities used by smartphone businesses to attract those customers.
Example of how to write this in an exam
The key difference is that a market describes the buyers and the environment in which exchange occurs, while marketing describes the activities a business uses to connect with those buyers. For example, the Australian smartphone market includes potential smartphone customers, while smartphone marketing includes advertising, pricing, product design and social-media campaigns used to attract them.
WA Examples to Illustrate the Concepts
Local example - Surf shop in Scarborough
Imagine you own a surf shop on Scarborough Beach. Your market includes local surfers, beginners and tourists visiting the foreshore - and the store itself is a physical market where customers come in to buy boards, wetsuits and accessories.
Your marketing might include:
- posting surf-condition updates on Instagram
- offering beginner weekend lessons
- running TikTok ads during summer
- selling WA-made boards and surf gear
Perth supermarkets
The supermarket market in WA includes shoppers across Perth buying groceries each week and major competitors such as Coles, Woolworths, Aldi and IGA.
Their marketing includes:
- weekly catalogues and TV ads
- Everyday Rewards and Flybuys programs
- sponsoring WA events, such as Coles supporting Telethon
- digital promotions through apps and social media
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Sort eight examples by deciding whether each describes the market itself or a marketing activity.
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Biz Fact: Bunnings is so dominant in Australia that it controls over 50% of the hardware market nationwide.