Understanding Market
“Marketing takes a day to learn. Unfortunately it takes time to master.”
— Philip Kotler
In the traditional sense, the term 'market' refers to the place where buyers and sellers gather to enter into transactions involving the exchange of goods and services. It is in this sense that this term is being used in day to day language, even today. The other ways in which this term is being used is in the context of a product market (cotton market, gold or share market), geographic market (national and international market), type of buyers (consumer market and industrial market) and the quantity of goods transacted (retail market and wholesale market). But in modern marketing sense, the term market has a broader meaning. It refers to a set of actual and potential buyers of a product or service. For example, when a fashion designer designs a new dress and offers it for exchange, all the people who are willing to buy and offer some value for it can be stated to be the market for that dress. Similarly, market for fans or bicycles or electric bulbs or shampoos refers to all the actual and potential buyers for these products
The current meaning of market in the modern marketing sense is:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → A set of actual and potential buyers of a product or service
Option (1) A set of potential consumer of a product or service — Incorrect. It leaves out the actual buyers, those who already buy the product. The market includes both.
Option (2) A set of actual and potential buyers of a product or service — Correct. In the modern marketing sense, a market is not a place but a group of people: those who buy the product now (actual) and those who may buy it (potential). The passage’s example is all the people willing to buy a designer’s new dress.
Option (3) A set of actual and potential sellers of a product or service — Incorrect. The market is made up of buyers, not sellers. Sellers are the ones who serve the market.
Option (4) A set of actual and potential group of a product or service — Incorrect. ‘Group’ does not say who the people are. The market is a set of buyers.
Note: The passage is taken from the NCERT chapter ‘Marketing’: its section ‘Understanding Market’, with the Philip Kotler quote from the start of the chapter. It has been reproduced by NTA in the exam. NCERT (2026-27 Edition): “Understanding Market … But in modern marketing sense, the term market has a broader meaning. It refers to a set of actual and potential buyers of a product or service. For example, when a fashion designer designs a new dress and offers it for exchange, all the people who are willing to buy and offer some value for it can be stated to be the market for that dress. …” |