Markets Around Us Chapter Notes | Window on the Word Class 7: Solutions, Notes & Worksheets PDF Download

Understanding Markets

Any space (physical or virtual) that facilitates the exchange of goods, services, and information between buyers and sellers defines a market. Markets act as the bridge connecting producers and consumers.

Key Points:

• Markets are spaces where goods, services, and information are exchanged between buyers and sellers.
• Producers and sellers face challenges to make goods accessible to consumers.
• In this chapter, we will explore the functioning of markets around us.

Wholesalers and Retailers

• Markets in ancient times were where goods and services were directly exchanged between buyers and sellers without intermediaries or money.
• Over time, markets have evolved significantly to involve complex activities, with various intermediaries now present between producers and consumers.
• These intermediaries, known as sellers or traders, are broadly categorized into two types: wholesalers and retailers.

The Difference between Wholesalers and Retailers

Wholesalers

• Wholesalers purchase goods in bulk directly from producers.
• They mainly sell goods to retailers and other wholesalers, not directly to consumers.
• Upon receiving goods, wholesalers often sort, grade, and repack them into smaller quantities.
• Wholesalers specialize in dealing with a limited range of items.
• Due to handling large quantities, wholesalers need spacious storage facilities known as warehouses.
• Wholesalers might occasionally offer goods to retailers on credit.
• Wholesalers purchase goods directly from producers in large quantities, enabling them to sell at prices lower than those offered by retailers.
• Unlike retailers, wholesalers do not provide discounts for stock clearance or to attract customers.
• Every city has designated areas that serve as wholesale markets, which do not necessarily need to be centrally located.

Retailers

• Retailers purchase goods from wholesalers or sometimes directly from manufacturers in smaller quantities.
• Retailers sell products directly to consumers.
• Retailers typically sell goods exactly as received.
• Most retail shops offer a variety of products to meet consumer demands, although some specialize in specific categories.
• Retailers, operating in smaller scales, require less storage space.
• While most retailers do not provide credit to customers, some local retailers may offer credit to regular clients.
• To make a profit, retailers sell goods at prices higher than their purchase rates from wholesalers, adding their costs to the final price.
• Big retail stores often provide discounts to clear old stock and attract customers.
• Location is crucial for retailers to maximize customer traffic and sales.

Different Types of Retail Markets

• Weekly markets: Held in specific areas on fixed days each week, common in rural and small town settings. Vendors set up temporary stalls offering a variety of goods at lower prices compared to traditional shops.
• Neighbourhood markets: Serve the immediate needs of local residents, including both permanent stores like grocery and hardware shops, as well as roadside vendors selling goods such as fast food and fruits.
• Supermarkets: Large retail stores offering a wide range of products under one roof, convenient for customers looking for variety and convenience.
• Malls: Complexes housing multiple stores, entertainment options, and dining facilities, providing a complete shopping and leisure experience.
• Online stores: Virtual platforms where consumers can purchase goods and services over the internet, offering convenience and accessibility.

Supermarkets and Malls

• Supermarkets are large retail outlets selling food and household goods. Customers serve themselves.
• They offer goods at lower prices due to large-scale sourcing.
• Consumers benefit from a variety of brands in one place.

Malls

• Malls are huge, multi-storey shopping complexes with various stores under one roof.
• They house eateries, gaming centers, and movie theaters.
• Consumers can find groceries, books, electronics, and more in one location, saving time and fuel.

Impact

• Supermarkets and malls threaten small retailers' livelihood.
• Supermarkets offer goods at cheaper rates due to direct sourcing.
• Malls sell branded goods with aggressive marketing, affecting non-branded goods sold by small shopkeepers.

Mobile Retailers

Mobile retailers are individuals who sell goods from carts, buses, or trains. Examples include ice cream vendors and fruit or vegetable vendors.

Specialty Stores or Single-Line Shops

• These stores focus on specific products like cameras, computers, medicines, or women's clothing. They provide a wide range of goods within the same category to consumers.

Chain Stores

• Chain stores sell a single product or brand across multiple branches. They are managed centrally, often by the manufacturers themselves. Examples include outlets operated by Bata, Titan, Raymond, and Baskin-Robbins.

Online Retailing

• Internet retailers like Flipkart and Amazon offer customers the convenience of shopping online for various products without leaving their homes.
• Online retailers can offer lower prices compared to traditional stores due to savings on expenses such as rent, electricity, and display costs.
• The popularity of smartphones has further simplified online shopping, contributing to its rapid growth in recent years.
• Online retailing has become a significant challenge to traditional brick-and-mortar shops.

Factors That Determine People's Choice of Markets

What influences a consumer's choice of market?

• Convenience: Consumers often prefer nearby or easily accessible markets.
• Availability: Consumers seek specific products that may not be found locally.
• Quality and Variety: Some consumers prioritize quality, even if it means traveling further, or prefer larger retail outlets for more options.
• Credit: For expensive purchases, like electronics, consumers may prefer shops offering credit facilities.
• Price: Most consumers look for good value; some prioritize quality over price, willing to pay more for satisfaction.

Does Equality Prevail in Markets?

• In a free market (where prices are set by demand and supply, not by government intervention), inequality is prevalent.
• For instance, there is income inequality among retailers selling similar goods in different locations.
• The earnings of a mobile ice-cream vendor are significantly lower than those of an ice cream parlor owner at a supermarket.
• Buyers also vary, with some struggling to meet basic needs while others can afford luxuries.
• There is substantial disparity in earnings between wholesalers, retailers, and original producers, especially for perishable goods like fruits and vegetables.
• Further insights into these disparities will be explored in the next chapter, focusing on the operations of wholesale grain markets.