MARKETS AND CUSTOMER/THE SYSTEM OF SALES

THE SYSTEM OF SALES
CHAPTER II
MARKETS & CUSTOMERS
WRITTEN BY:
SYED AQEEL RAZA
MASTER OF COMMERCE & ARTS

CHAPTER II
MARKETS AND CUSTOMERS
MARKETS 2.1 – 2.5
TYPES OF MARKETS
Commodity Market
 Spot Market
 Local Market
 Foreign Market
 Auction Market
 Black Market
Non-Commodity Market 2.5 – 2.8
o Knowledge Market
o Service Market
o Financial Market
o Stock Market
o Foreign Exchange Market
o Bond Market
o Predictive Market
o Stock Market Terminology 2.9 – 2.20
TYPES OF SHOPS 2.21 – 2.25
o Eatable Items shop
o Non-Eatable items shop
o Supporting eatable and non-eatable shops
CUSTOMERS 2.26 - 2.30
o Consumer
o Purchaser
o Buyer
o Importer
o Client
o Patient

TYPES OF CUSTOMERS 2.31 – 2.35
o Potential Customer
o Non-potential Customer
o Discount Asking Customer
o Loyal Customer
o Unplanned Customer
o Need Based Customer
o Wandering Customer
NATURE OF CUSTOMERS 2.36
o Cash Customer
o Credit Customer
CATEGORY OF CUSTOMER 2.37 – 2.38
o Below the mark customer
o Under the mark customer
o Above the mark customer
KIND OF CUSTOMER 2.39
o Male Customer
o Female Customer3
o WRITER 2.40

Markets and customers 2.1
MARKETS
The market is the place where customer or client
gets their needs according to their requirement. The
needs are in verities in different products and
product wise markets are established where the
customer goes to get his need and if he needs
electronic items, he will have to go electronic market
and if he needs food, he will go to the food market
and so on. The different names of the market
according to the products are available which have
been given by customer or client as to bazaar, gold
market, electronic market, vegetable market,
financial market, black market etc.etc. and like this,
the shops are also identified by their selling products
as to glossary shop, Pan-sari shop, vegetable shop,
fruit shop, electronic shop, computer shop, milk
shop, etc.
The purpose of all markets and shops is same as to
give the satisfaction of customers’ need.
No market is without a customer.

TYPE OF MARKETS
In market economies, there are a variety of different
market systems exist depending on the industry and
the companies.
It is important for small business owners to
understand what type of market is suitable for their
product.
The following type of markets
- Commodity Market
o Spot Market
o Local Market
o Foreign Market
o Auction Market
o Black Market
- None Commodity Market
o Knowledge market
o Service Market
o Financial Market
 Foreign Exchange Market
 Bond Market
 Predictive Market
The satisfaction of customers’ need is the basic of all markets.

COMMODITY MARKET
The physical market is a set up where buyers can
physically meet the sellers and purchase the desired
merchandise from them in exchange for money.
Shopping malls, department stores, retail stores are
examples of physical markets.
Commodity market requires seller and purchaser.
o SPOT MARKET
The spot market is the market which is traded
immediately or on the spot with spot prices. The spot
market can be organized markets or exchanges or
over-the-counter (OTC) markets.
The spot market is also referred to as the “physical
market” or the “cash market” because of the instant
and immediate place and movement of orders are
made as at current market prices.
The spot market is direct cash sale market.

o LOCAL MARKET
The local market is the market from where clients
and customers buy a product or service in the region
or area near to them. The local market includes
customers located within the region the product or
services is produced or made available.
The local market is also known as neighborhood
market and for marketing or selling purpose it is
important to know who will buy the product, where
those are located and how far they will travel to
obtain the product.
The local market is the neighborhood market.
o FOREIGN MARKET:
The out of the country market for trading goods is
named foreign market. The country’s market exports
its product to foreign market for getting a foreign
exchange or selling the products or raw materials
which are abundant with.
The foreign market is outsource market.

o AUCTION MARKET
In an auction market, the seller sells his goods to one
who is the highest bidder.
The auction market is bidder market.
o Black market
A black market is a setup where illegal goods like
drugs and weapons are sold.
Black market relates to illegal things.
NON-COMMODITY MARKET
In such markets, buyers purchase goods and services
through internet. In such a market the buyers and
sellers do not meet or interact physically, instead the
transaction is done through internet.
The non-commodity market is not the physical market.

KNOWLEDGE MARKET
Knowledge market is a set up which deals in the exchange
of information and knowledge-based products.
The knowledge market discusses knowledge.
SERVICE MARKET
The service market is the market where service
providers gather to introduce them or to set up their
offices or shops just like lawyers, doctors, engineers,
etc.
The service market gathers service providers.
FINANCIAL MARKET
In the financial market, the exchange of liquid assets
or cash is dealt with a financial institution.
The financial market deals with a financial institution.

STOCK MARKET
The stock market is also called equity market or share
market and is the aggregation of buyers and sellers of
stocks called shares which represent ownership claims on
businesses but have no physical or discrete entity and
controlled by stock exchange and a stock exchange is a
place where, or an organization through which, individuals
and organizations can trade stocks.
The stock market is an equity market.
FOREIGN EXCHANGE MARKET
In foreign exchange market, parties are involved in trading
currency. One party exchanges one country’s currency with
an equivalent quantity of another currency.
The foreign exchange market (Forex, FX, or currency
market) is the global over the counter (OTC) market for the
trading of currencies. This market determines the foreign
exchange rate. It includes all aspects of buying, selling and
exchanging currencies at current or determined prices.
The foreign exchange markets deal with foreign currency.

BOND MARKET
A marketplace where buyers and sellers are engaged
in the exchange of debt securities, usually in the form
of bonds is called a bond market. A bond is a contract
signed by both the parties where one party promises
to return the money with interest at fixed intervals.
The bond market deals with debt securities.
PREDICTIVE MARKET
The predictive market is a set up where the exchange of
good or service takes place for future. The buyer benefits
when the market goes up and is at a loss when the market
crashes.
This market predicts future business.

STOCK MARKET TERMINOLOGY
Formal financial statements, the Auditors’ Report, together with
the Director’s Report issued by a company are called Annual
Report. These financial statements are usually prepared at the
close of the company’s financial year.
ARBITRAGE
The simultaneous purchase and sale of the same security on
different stock exchanges at prices which yield a profit are called
arbitrage.
BEAR
Bear is an investor who anticipates a decline in stock prices.
BEAR ACCOUNT
It is the excess sale made by bear operators over the purchases
made by bull operators.
BEAR MARKET
A bear market is a market in which stock prices are declining in
general. A serious decline is called a depression. A short decline in
a generally rising market is looked upon as a technical correction.

BLUE CHIP
They are the shares of the leading companies having a reputation
of excellent management and strong financial base or in other
words a large well-established company with a history of
profitable operation.
BULL TRAPPED
A bull is an operator in an organized market with an optimistic
feeling of the rise in prices. Sometimes the purchasers dodge him
knowing that he is in overbought position and suspend purchases
to force him to sell at lower price. In this situation, the bull is
trapped and faces loss consequently.
BEARISH HELLA
It means a temporary suspension of the market due to abnormal
fall in prices and providing an opportunity for the speculators to
settle their accounts.
BREAK EVEN
It is a point where transactions terminate with neither profit nor
loss.

BID AND ASK
The bid is the highest price anyone has offered to pay for a
security at a given time; the asked is the lowest price anyone has
offered to accept for a security at a given time.
BOOKING CLOSE
Book close means the closure of books by a company to
determine the shareholders’ rights to receive a bonus, dividend,
rights, etc. No transfers are recorded during the period.
BOOM
Boom denotes greater activity on the stock exchange.
BULL
Bull is an investor who anticipates for a rise in stock prices.
BULL MARKET
The bull market is a market in which stock prices are rising in
general. If the market is recovering from a deep decline, the early
stage of the uptrend is called an up reversal, turnaround, rally or
recover.
CAP PRICE
It is the highest price on which buyers are ready to purchase on a
particular day in an organized market.

CAPITAL GAIN/LOSS
Capital gain or loss means profit or loss arising from the sale of
securities.
CAPITAL GAIN TAX
Capital gain tax denotes that tax is payable on profit arising from
appreciation in value of the investment, realized t the time of
selling or maturity of investment.
CLEARING
Settlement or clearance of dues accounts in stock exchange refers
clearing.
COLLATERAL
Collateral means securities or other properties pledged by a
borrower to secure the payment of the loan.
COMMISSION
The fees payable by a client to the stockbroker for trading in
securities on his behalf is a commission.

CONTRACT
A statement sent to a client by the stockbroker, giving details of
securities purchased or sold.
CUM-DIVIDEND
The term implies that the buyer is entitled to the dividend
currently declared.
CUM-RIGHT
Shares having the right to receive the upcoming rights issues
offered by the company.
CAP PRICE
It is the highest price on which buyers are ready to purchase on a
particular day in an organized market.
DIVIDEND
That is the part of a company’s profits which is distributed among
shareholders, usually expressed in rupee per share or percentage
of the paid-up capital. It could be in the form of cash or stock
(Bonus share).

EARNINGS PER SHARE
A profitability indicator calculated by dividing the net
after-tax earnings available to common stockholders
during a period by the average number of shares
outstanding at the end of that period.
EQUITY
The owners’ interest in a company’s capital usually
referred to as ordinary shares.
EXPOSURE
Exposure means an aggregation of the unsettled
amount of purchases and sales under each Market
with no netting applicable to respective Market. The
exposure is calculated using real-time values. All
trades are counted as exposure unless they are
marked for delivery.
FACE VALUE
Face value means the value of a security that
appears on the face of the certificate unless the
value is otherwise specified by the issuing company.
It is also termed as par value.

GAINED GROUND
It is a terminology of the market report to show the
condition of recovery. That is, prices regained after a
dull period.
INITIAL PUBLIC OFFERING (IPO)
The offering of equity shares of a company to the
general public for the first time.
INSIDER TRADING
Insider trading normally occurs when an insider, that
is, a director, an officer, a banker or a favored
customer, due to his access to special information
about the company’s affairs, which has not been
made available to the market influence the value of
shares to his advantage.
LIMIT PRICE
Limit price means the price beyond which an investor
would not consider executing a transaction involving
the purchase or sale of securities.

MARKET PRICE
In case of a security, the market price is usually
considered the last reported price at which the
security is sold.
NOMINEE
The nominee is an individual who is designated by
the account-holder to receive all cash and custody in
case of the account holder's demise.
ODD-LOTS
Odd-lots mean a quantity of stock less than the
established/ allowed unit of trading in the regular
market.
ORDINARY SHARES
Ordinary share is the most common form of shares,
which entitle the owners to jointly own the company.
Holders may receive dividends depending on the
profitability of the company and recommendation of
directors.

POWER OF ATTORNEY
Power of Attorney means an individual who is
designated by the account-holder to operate the
account with the same privileges as the account
holder.
PORTFOLIO
A collection of investment is called portfolio.
BEAR COVERING
A bear operator in a market usually operates under
pessimistic feeling, i.e., he expects a fall in prices.
Sometimes his expectation goes wrong and the price
rises instead of a fall. He has in all cases to meet
commitments. He has to purchase at loss even. This
is bear covering.
QUITE SPELL
It is a terminology of the market report interpreting
poor transactions or negligible business activity for
the day reported for.

PRICE/EARNINGS RATION (P/E)
The P/E ratio is a measure of the level of confidence
(rightly or wrongly) investors have in a company. It
is calculated by dividing the current share price by
the last published earnings per share.
PUBLIC LIMITED COMPANY
A company whose shares are offered to the general
public and traded freely on the open market and
whose share capital is not less than a statutory
minimum.
REGULAR MARKET
Regular market is available for shares trading with
the regular settlement of T+2.
RIGHTS-ISSUE
The issue of additional shares to existing
shareholders when companies want to raise more
capital is called right issue.

SECURITIES
Securities mean a broad term for shares, corporate
bonds or any other instrument of investment in the
capital market.
SETTLEMENT
Once a trade has been executed, the settlement
process transfers shares from seller to buyer and
arranges the corresponding exchange of money
between buyer and seller.
SHORT SALE
It occurs when a person sells shares that he does not
own. A short sale is usually made in the hope that a
subsequent market decline will enable the seller to
‘cover his position’ at a profit, that is, to buy at a
later date and at a lower price the shares he needs
to deliver against his original short sale.
SPREAD
The difference between the bid and offer price of a
market maker is called spread.

STOCKBROKER
A member of the stock exchange who deals in shares
for his own and behalf of clients is a stock broker.
UPPER & LOWER CIRCUITS
For overall market risk management, the KSE has
built-in checks to curb drastic market movement and
has placed a 5% positive and negative limit on all
scrip prices.
YIELD
It is also known as a return. The dividend or interest
paid by a company expressed as a percentage of the
current price or if you own the security, of the price
you originally paid. The return on the stock is
calculated by dividing the total of dividend paid in
the preceding 12 months by the current market
price.

TYPES OF SHOPS:
The market is the name of shops’ collection and
shops are not in one kind but in varieties just like a
sea of shops. The shops are made where there is the
demand of them as we see the shops of the same
products in the market which develop a particular
market like the electronic market, food market,
glossary market, medical market etc.
The process of making shop is started from the need
of a man and on need, manufacturer, traders, and
services providers are working day and night.
Here are, I am of the opinion, three types of shops;
o Eatable items shops
o Non-eatable items shop
o Supporting eatable and non-eatable shops
The need is the shop.

Eatable items shops
The food, water, medicines, etc. are the basic need
of anyone and without them, no one can imagine the
life then one has to acquire eatable items from shops
on daily basis and because of it, the eatable items
and their shops are called running items or running
business.
The eatable items belong to the heath of a man and
have the expiry date on packed items.
Eatable items are for saving a life.
Non-eatable items shops
Non-eatable items shops are the shops that are
needed for life as the man cannot live without cloth,
house, light, gas, etc. and he has to acquire them
from shops.
The non-eatable items do not belong to man’s health
and have a long life.
Non-eatable items are for support the saving of life.

Supporting eatable and non-eatable shops
The question remains that what is the role of
services providers in eatable and non-eatable items?
The services providers are giving their services for
supporting eatable and non-eatable items as the
doctor check up patient and give medicines, his
checking to the patient is supporting non-eatable
and giving medicine is supporting to the patient
because the patient will eat medicine, not to his
check-up.
Services provider is the supporting tools of
eatable and non-eatable.

Here are some shops from the sea of shops on which
I am glimpsing here;
Eatable items shop
Vegetable
Milk
Fruit
Glossary
Meat
Glossary
Food
Medical
Others
Non-eatable items shop
Electronic
Cloth
Footware
Mobile & Computers
Construction materials
Others

Supporting eatable and non-eatable shops
Clinics
Hospitals
Doctors
Engineers
Lawyers
Others
The Shops have different nature according to the
customer and need. The shop may locate anywhere
where it needs.

CUSTOMERS
What is a customer?

CUSTOMERS
Generally, the customer is a person, who needs goods and
goes shop to get his need where the seller of goods or
service provider calls his/her name as a customer in
business language. In other words, we can say the customer
is who, who purchases goods or services from another
person or seller.
This term customer is used mostly in a commodity business.
A customer is a person who needs goods.
The customer has many other names according to the
nature of business;
o Consumer
o Purchaser
o Buyer
o Importer
o Client
o Patient

All type of customers exchanges needs.
CONSUMER:
The consumer is who consumes purchased products or wants the
product for us to use. Obviously, the terms customer and consumer
are often interchanged. So with a definition of marketing, we will aim
to anticipate the needs and wants of consumers and/or customers.
Needs and wants may differ. So let’s return to our mother and her
child, since a mother may wish to feed her child nutritious food at
mealtimes, the child may wish to eat sugary and less healthy food.
The mother is the customer and she purchases based on her need,
whereas the child is the final consumer and he or she may focus on
what they want. So needs and wants may differ between customers
and consumers.
A consumer is a person who wants goods.
PURCHASER
A purchaser is a person or entity that is a recipient of a goods or
service provided by a seller under a purchase order or contract of
sale. Mostly, the purchase is made as credit purchase under the
purchase order or the contract of sale. The party from whom the
purchaser or entity purchases goods or services is called debtor
means to pay the amount later to him.
The purchaser is an entity who purchases the goods or services under an
agreement.

.
BUYER:
A buyer is a person who buys goods under contracts and a
person who purchases material used to make goods in
sometimes called a purchasing agent.
The buyer works on goods.
IMPORTER
An importer is a person or organization that brings goods or
services into a country from abroad for sale which is called
import purchase. In import clearing agent, customs and
many entities are involved in import.
The Importer fulfills country’s need.
CLIENT
This term is used in services business mostly in professional
services providers business.
The professional advisor, lawyers, accountant, advertising
agency, architect, etc. call their customer as a client.

The client is a term mostly used in the services business.
PATIENT:
The patient is who that needs medical treatment and the
doctor calls him patient. The doctor charges his fee from
patient comes in the services business. Here is patient is the
customer and the doctor is a seller because the doctor is not
doing his work without his fees but sells his professional
services and the patient is not examined without giving
money to doctor.
The patient is getting services and doctor is giving his services.

TYPES OF CUSTOMERS
Customers play the most important role in business. In fact,
the customer is the actual boss in a deal and become the
cause of profit of an organization. Because of the customer,
the quality of the product and services is improved because
the quality of the product and service is tested by the
customer. Hence it’s important for an organization to retain
customers or make new customers and flourishing business.
To manage customers, organizations should follow some
sort of approaches like segmentation or division of
customers into groups because each customer has to be
considered valuable and profitable.
Here are many types of customers they change their status
on the situation of deal wherein;

POTENTIAL CUSTOMER
The need makes customer potential of any type. If a
customer has need of thing, he will fetch money from
anywhere to get it. Hence, the seller should not understand
any customer potential or non-potential. The ability to make
the customer potential goes to a sale man.
The sale man or seller categorized customers to his product
and according to the customer, they put the price before the
customer.
The need make customer potential of any type.
NON-POTENTIAL CUSTOMER
The customer is who that wants to purchase anything from
the seller and the non-potential customer wants to purchase
but from any shop and any product from the variety of the
same product. The customer can be light and heavy but
customer is customer. Today the non-potential customer can
make potential later.

The non-potential customer is killed by seller’s behavior.
DISCOUNT ASKING CUSTOMER
Most of the customers especially lady customers ask a
discount from the seller and they like shops where the prices
are bargained because most of the products have fixed
prices and have no chance of bargain wherein the customer
is compelled to purchase the product on fixed price.
Most of the purchasing decisions are based upon how high
the markdown in a sale is at any given time.
Discount is the best source of selling old stock.
LOYAL CUSTOMER
The customer who repeats order or one who regularly uses
a company’s product and services is a loyal customer. This
type of customer is the lifeblood of the business and should
be respected. Because they were satisfied the first time, they
returned for more services or products. Therefore, as long as
you continue to satisfy their needs, you have a repeat
customer. It has been estimated that it can take up to five
times more work to replace a loyal customer as it would to
simply continue to serve them well enough to keep them.

The customer’s loyalty is proved by repeat orders.
UNPLANNED CUSTOMERS
This type of customer makes purchasing decision to buy at
the time of purchase. They may arrive at a store or website
to buy something they do need but then stay to look at other
items. Often, this type of customer will make a decision on
the spot for something that seems good to them at some
particular time for no need-based reason.
The unplanned customer purchases any brand of product.
NEED-BASED CUSTOMER
These customers are product specific and only tend to buy
items only to which they are habitual or have a specific need
for them. These are frequent customers but do not become a
part of buying most of the times so it is difficult to satisfy
them. These customers should be handled positively by
showing them ways and reasons to switch to other similar
products and brands and initiating them to buy these. These
customers could possibly be lost if not tackled efficiently with
positive interaction.
The need-based customer purchases on need.

WANDERING CUSTOMER
These are the least profitable customers as sometimes they
themselves are not sure what to buy. These customers are
normally new in the industry and most of the times visit
suppliers only for confirming their needs on products. They
investigate features of most prominent products in the
market but do not buy any of those or show least interest in
buying. To grab such customers they should be properly
informed about the various positive features of the products
so that they develop a sense of interest.
Wandering customer is not sure what to buy.

NATURE OF CUSTOMERS
CASH CUSTOMER
A purchaser who pays cash rather than by cheque, credit
card, or charge account is a cash customer.
The cash customer is an apple of the eye to shopkeeper.
CREDIT CUSTOMER
The credit customer is who that purchases goods on credit
giving cheque. This type of customer purchases goods
under an agreement.
The credit customer is the liability.

CATEGORY OF CUSTOMERS
The customer can be poor, middle and rich but the
customer is a customer, he can be proofed potential or
non-potential for the seller.
The customers can be categorized into three classes;
o Below the mark customer
o Under the mark customer
o Above the mark customer
BELOW THE MARK CUSTOMER
The customer who has no purchasing power of the product
need to him comes under below the mark customer’s
category. Below the mark customer is the customer whose
income is limited and he has to in and out within his limit and
if he will come to purchase the product its mean he had
earmarked to do so. This customer will ask discount, bargain
price and do anything to get the product because of need.
This category of customer belongs to a lower class.

UNDER THE MARK CUSTOMER
This category of the customer has a little purchasing power
of the product which he wants to purchase and we can say
him the middle-class customer. The middle class of the
society mostly does jobs and small business. In this class,
the customer wants discount and bargain price and will go to
the market up to his level. This type of customer will not like
to go upper-class market because he knows that the prices
in those markets are out of his pocket.
This category of customer belongs to a middle class.
ABOVE THE MARK CUSTOMER
This category of customer belongs to the upper class of the
society and has the power to purchase which he wants. In
this type, the customer does not compromise on quality
because of which he prefers to purchase the branded things
of the top companies or of the foreign countries on the price
mentioned or on the demand of the seller but some of them
from this type of customers have separate opinion and
purchasing decision.
We can say that any customer from any category can do
anything in purchasing.

This category of customer belongs to an upper class.
KINDS OF CUSTOMER
MALE CUSTOMER
A customer belongs to male gender is the customer that will
purchase the product on the price which the seller is saying
on/or after a litter bargaining and discussion. The seller tells
the price of the product more or less exactly to the male
customer because he knows the nature of him and because
of the reason the male customer also knows the nature of
seller.
The male customer saves the time of seller and his own.
FEMALE CUSTOMER
The female customer is the opposite customer of man. She
wants discount and bargains at last limit. The shopkeeper
tells her the price of things above the price because he
knows that she will bargain at any rate. The benefit of it goes
to the shopkeeper and sometimes he sells his product above
value.

The female customer wastes the time of seller.
The customer and market are connected to each
other as the appetite and food. The markets
have no meaning without customers and
customers without markets.
The customer is important for a seller and the
shop is important for the customer.
The customer is always right.
WRITER

MARKETS AND CUSTOMER/THE SYSTEM OF SALES

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