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What is commercial business? The role of the market in commercial business

Every day, we still see the continuous evolution of commercial activities throughout our lives, connecting the interference between production and consumption needs, promoting socio-economic development. effectively. So, what is commercial business? And what role do the current market types play in the trading business?

Let's find out with 1C Vietnam in the following article!

What is commerce?

Trade is the process of buying, selling and exchanging goods in the market, reflecting the needs and desires of individuals and society. To meet this complex, diverse need, we have created a rich trading system, with different forms of exchange.

  • Free: This is a form of providing goods and services without asking for anything in return. Commonly found in humanitarian aid, social assistance, or support from a nonprofit organization.
  • Supply for the benefit of society: Products and services are made available to everyone in society, often financed by taxes from the public. Examples include security, defense, education and public health services.
  • Market buying and selling: This is the basis of traditional commerce, where goods and services are priced and exchanged based on consensus between buyers and sellers. It creates competition, encourages innovation, and responds quickly to market needs.

To a large extent, commerce includes all business activities from production to consumption. However, under Vietnam's Commercial Law, commerce also includes the provision of services and other activities with the aim of making a profit. Some industries such as insurance, banking, and transportation, even though they sell services, are not within the scope of commerce in the narrow sense.

In summary, commerce, depending on the angle of approach, can be broadly understood as any business activity aimed at making profit, including the purchase and sale of goods, provision of services and promotion of trade. commercial; or more specifically understood as the exchange of materials and goods on the market together with the services associated with that exchange.

What is commercial business?

Commercial business is the activity of using finance, capacity and creativity of individuals or organizations to buy and sell goods, in order to make profits. According to Vietnam's Commercial Law from 2006, commerce is not only the purchase and sale of goods, but also includes:

  • Buy and sell goods.
  • Provide related services.
  • Trade promotion, such as advertising, promotions, fairs and exhibitions.
  • Acts of intermediaries, including brokers, agents, and fiduciaries.
  • Some other activities such as outsourcing, auction, logistics services, and franchising.

All of the above activities are aimed at developing and expanding the market, creating added value for customers and earning economic benefits for businesses.

What is the market?

The market is an economic concept closely related to the social division of labor and the production of goods. Initially, the market was considered as a place to exchange and buy and sell goods between economic entities, often limited in space and time, with both buyers, sellers and objects of exchange. However, with the development of production and circulation of goods, the market is becoming more and more complex and diverse.

Philip Kotler defines a market as a place where potential customers with specific needs are able to exchange to satisfy their needs. In a modern context, a market can be more broadly defined as an area of exchange where the price, quality, quantity, and variety of products are determined through competition between sellers and competitors. buyer's choice.

In short, the market is a place that reflects the interaction and the need to exchange goods between economic actors in a diverse and complex trading system.

The role of the market in commercial business management?

Markets play a central role in shaping and guiding the business decisions of every commercial organization.

  • For the national economy:

The market is the center of the economy, acting as a bridge between production and consumption, breaking the self-sufficient production model and creating linkages between specialized production regions. The market meets consumer demand, introduces new products, ensures the balance of supply and demand, and is a place to reflect and test the State's economic policy and social communication behavior.

  • For Businesses:

The market plays an important role in shaping and guiding all activities of enterprises. It is not only a goal but also a valuable source of information to help businesses understand the needs and desires of customers. Based on information from the market, businesses can choose effective production, advertising, and distribution strategies. Markets also help businesses measure performance, through revenue, market growth, and customer feedback. This allows businesses to continuously adjust and improve, stay in position and adapt to changing market conditions.

Market classification in commercial business?

The market is classified according to many different criteria, serving research and development purposes:

  • Based on the buyer:

- Commodity market: includes manufactured and consumed goods.

- Service market.

- Labor market.

- Currency market.

  • According to the use of the product:

- Market for factors of production.

- Market for consumer products.

  • By geographic scope:

- Local market: depending on the culture and customs of each region.

- National market: product quality must be outstanding.

- Regional markets: such as ASEAN, EU.

- International market: comply with international laws and practices.

  • According to the level of interest of the business:

- Common market.

- Product market.

- Market niche.

- Key market.

  • By occupation level:

- Current market: doing business.

- Potential market: exploitation in the future.

  • According to the number of buyers and sellers:

- Perfectly competitive market.

- Monopolistic market.

- Competitive market - monopoly.

  • Based on the role for the business:

- Main market: concentrated large resources.

- Secondary market: satisfy specific needs, small income.

  • According to product properties:

- Substitute product market: products with similar use value.

- Complementary product market: related products in consumption.

Thus, the market can be classified according to many criteria, each criterion reflects a specific aspect, helping enterprises to grasp and orient business strategies more effectively.

1C Vietnam hopes that the above article has helped provide readers with useful knowledge to prepare themselves a basic foundation in the field of commercial management. Follow news from 1C Vietnam to be updated with the latest management knowledge and digital transformation trends!

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