Whats the best market to target?

Whats's the difference between the terms ' market ' and ' industry '?

• I need someone who knows economics well to answer the following..... 1.What is the difference between the terms 'industry' and 'market'? For example, can i say 'industry segmentation' instead of 'market segmentation'? 2. Michael E Porter refers his 5 forces for competitiveness to an 'industry'.Does he also mean the same for a 'market'? iF I need to enter into a 'market', can i also apply his 5 forces? Do they actually meant the same meaninig? 3.When one say 'market struture', does he also meant 'industry stucture'?What is the difference if not? 4.When one says he wants to target a 'market', does one meant he wants to target an 'industry'? Please give me specifics.Thks.Hope to hear from you soon.

• Answer:

  "Market" and "industry" are not interchangeable terms. A "market" is a mechanism for buyers and sellers to exchange goods and services, while an "industry" is a collection of companies that compete with one another. AmosWeb Economic Class Portal, "Topic: The Industry" http://www.amosweb.com/cgi-bin/cls_dsp.pl?crs=micro&lsn=13&pge=5 "An industry is one or more business firms that produce similar products." AmosWeb Economic Class Portal, "Market" http://www.amosweb.com/cgi-bin/gls_dsp.pl?term=market "The organized exchange of commodities (goods, services, or resources) between buyers and sellers within a specific geographic area and during a given period of time. Markets are the exchange between buyers who want a good--the demand-side of the market--and the sellers who have it--the supply--side of the market. In essence, a buyer gives up money and gets a good, while a seller gives up a good and gets money." 1)Industry segmentation vs. market segmentation: These terms are not interchangable. An industry might be segmented by type of supplier or type of distribution (or some other distinguishing characteristic). For example, let's examine publishing. You might have newspaper publishers, magazine publishers, and book publishers. They all sell printed words on paper, putting them in the same "publishing" industry. However, each segment would have unique production and distribution requirements. Some of these might be small and focused with a handful of publications, others might be large media conglomerates for whom publishing is one of many businesses. Market segments might describe different types of customers. Each of these segments could have unique 'needs' or might be attracted to varying advertising methods. For example, if you sold computers, you might have a "Video Gamer" segment, a "Home Office" segment, a "Small Business" segment, a "Corporate IT" segment, a "Fortune 500" segment, a "Government" segment, and "Education" segment. Each of these customers would respond to different types of purchasing incentives, each has a unique process for the buying decision, and each would potentially buy differeing quantities of computers at time of purchase. In addition, your competitors might effectively compete with you in some segments, but not others. 2) Porter's 5 Forces pertain to analysis of the competitiveness of an industry. An industry analysis using Porter's 5 Forces would help you to determine whether or not your company could expect long-term profitability in a given industry. One would not use Porter's 5 Forces to examine a market. However, information about your market would be used as data points in your Porter analysis, particularly when analyzing "Buyer Power". A market analysis, in contrast to a Porter analysis, is usually concerned with changes in supply and demand and the impact those changes have on price. 3) Market structure is not interchangeable with industry structure. Typically, one would use the term "market structure" and I have never heard the term "industry structure" used. A market structure is generally defined by the competitors in the industry, and so I can understand why one might think of it as an industry structure. However, my suggestion would be to use "market structure" as your choice. 4) Someone could, if speaking in business slang, say they are targeting an industry as their market. However, this would not be correct in the textbook sense of the word since, as you have discoverd, these words have very different meanings. Businesses often refer to their customers as their market. However, strictly speaking, customers only represent the "demand" force of a given market. Additional Links and Definitions: A presentation of a Porter Analysis: "Grainger, Industrial Supply Industry", by David Castro, Ruben Valdez, Mike Garcia, Rene Riojas Jr., and Martin Pena Jr. (February 28, 2001): http://www.coba.panam.edu/faculty/hkaynak/kaynak_grainger/grainger.htm AmosWeb Economic Class Portal, "Market Structure": http://www.amosweb.com/cgi-bin/gls_dsp.pl?term=market+structure "The manner in which a market is organized, based largely on the number of firms in the industry. The four basic market structure models are: perfect competition, monopoly, monopolistic competition, and oligopoly. The primary difference between each is the number of firms on the supply side of a market. Both perfect competition and monopolistic competition have a large number of relatively small firms selling output. Oligopoly has a small number of relatively large firms. And monopoly has a single firm." AmosWeb Economic Class Portal, "Market Analysis": http://www.amosweb.com/cgi-bin/gls_dsp.pl?term=market+analysis "The use of the market model to examine economic phenomenon involving demand, supply, prices, and exchanges. The simplest market analysis involves identifying equilibrium price and quantity, which is the point of intersection between the demand and supply curves. Some of the more useful market analysis, however, involves comparative static analysis of shifts in either the demand or supply curves, or both curves simultaneously. Other market analysis examines the consequences of price ceilings, price floors, and taxes." Search Terms: economic dictionary ://www.google.com/search?q=economic+dictionary Search Terms: Porter 5 forces competitiveness ://www.google.com/search?q=Porter+5+forces+competitiveness I hope you find the information helpful and easy to understand. However, if you have trouble with the concepts, please do not hesitate to ask for a clarification.