In the nineteenth century - the first quarter of the twentieth century. there was an evolution imperceptible at first glance: over several decades, the so-called "seller's market" gradually evolved into a "buyer's market".

The seller's market is a type of market in which the main market parameters (the range and quality of goods, their prices, terms of sale) depend to a greater extent on the owner of the goods offered to the market, i.e. the seller, not the buyer. A similar situation is typical for an economy in which the productive forces cannot provide the market with a sufficient amount of goods. The market in this case is experiencing a shortage or is in equilibrium (the volume of demand is approximately equal to the volume of supply). In such a market, only those goods that the manufacturer wishes to produce are sold, and not those for which the buyer has matured.

A different situation arises in the "buyer's market". Here, the buyer, not the manufacturer, sets the conditions for what and how will be sold on the market. A prerequisite for this situation is the growth of production volumes, which outstrips the demand of the population. This became possible only as a result of the industrialization of economically advanced states and the wild exploitation of wage labor.

The development of railway and other transport in the XIX century. allowed to form by the beginning of the 20th century. national markets, which made it possible to raise the issue of entering the world market for goods. In many countries, products from other parts of the world began to be sold in unlimited quantities. A brisk trade in goods of foreign origin was going on in Berlin, Bombay, London, Moscow, Paris ...

Consumers saw a whole list of previously unknown products: cars, bicycles, photographic equipment, electrical appliances, personal hygiene products. Mass production led to the depersonalization of the goods, as there were product samples that were similar in their characteristics, but made by different manufacturers. Started talking about themselves brands, which in the XXI century. knows the whole world: Coca-Cola, Nestle, Pepsi-Cola, Siemens, Singer, etc.

For the first time, the capitalist world is faced with what is called a crisis of overproduction, when it is better to destroy a product than to sell it for nothing on the market. It was an era of tough and even brutal competition. State governments, expressing the will of the monopolies, unleashed wars for markets and sources of raw materials.

The Russian Revolution of October 1917 showed the entire capitalist world that it was impossible to live like this any longer, that everything could be lost as a result of a social explosion. The most far-sighted politicians in the capital countries embarked on the path of “bourgeois reformism”: workers began to increase wages, reduce fines, schools began to be built for their children, pensions were introduced (note that in the USA pensions were introduced later than all highly developed countries), the working day was shortened , and corporatization began to be carried out at a number of enterprises. As a result, the working class in the most developed Western countries got the opportunity to create small savings, it got socially significant free time. The income gap that previously existed between the rich and the poor has narrowed. The concept of "proletariat" in Western Europe gradually began to lose its meaning, and part of the workers moved into the category of the "middle class".

All these changes could not but affect the market. As mentioned earlier, the seller's market has evolved into a buyer's market. Individual firms and companies began to actively fight for the consumer, offering him attractive discounts and bonuses, while actively using advertising.

The first advertising agencies appeared, performing functions close to modern ones. There was a need to distribute advertising not only in a single city or region, but also within the entire country, and sometimes in the territories of other states. This is the problem that advertising agencies have undertaken to solve. The first of these was an agency that opened in Boston in 1841. Its founder, US citizen W. Palmer, soon opened branches in other cities. The essence of his actions as a whole was as follows: W. Palmer bought up newspaper space in bulk, and then sold it to advertisers at retail. There was a difference between the amount that was spent on wholesale purchases and the amount received from retail sales. This was the income of the agency. Note, however, that W. Palmer himself did not create advertising products, advertisers brought him ready-made ads.

The first agency, which is now commonly called "full cycle" agencies, was also opened in the United States. Its founder, J. Batten, in New York in 1891, not only placed advertisements in the press, but also created them on his own.

The following factors contributed to the strengthening of the role of advertising: an increase in the circulation of newspapers, the cost of publishing which decreased every decade, and an increase in the number of consumers who can read these newspapers. If earlier newspapers were available only to well-to-do and educated citizens, then by the end of the 19th century. they have become an information necessity for the middle class.

The first publicly available independent newspaper of the modern type was the New York World. In 1883, its circulation was 100,000 copies. A few more years passed, and the circulation reached an astronomical figure of 600,000 copies. The newspaper was published twice a day (morning and evening). Hence the well-known expression “the morning papers report” to many of the movies.

In the nineteenth century along with newspapers, advertisements appear in magazines. These publications, usually published once a month, had the opportunity to publish well-illustrated color advertisements on their pages. Initially, it looked exclusive, but by the end of the century, colored advertising strips in magazines became commonplace. Such advertising was most effective in magazines targeted at a female audience.

Advertising began to be actively used at exhibitions. The first world industrial exhibition was organized in 1851 in London. However, the most famous was the Paris exhibition of 1889, dedicated to the centenary of the Great French bourgeois revolution.

In the 19th century the advertising schedule has fundamentally changed. The invention in 1860 of chromolithography made it possible to publish color images, and the invention of photolithography made it possible to transfer photographs to paper. The use of cheap artificial inks that reproduce colors as well as natural ones made it possible to print color advertisements in mass circulation. Thus advertising art rushed to the masses.

appeared in the 19th century. advertising posters can be safely called examples of high artistic creativity. The overall level of promotional images was quite decent. This fact is recognized by both modern art historians and advertising historians. An example is the advertising work of the French artist A. Toulouse-Lautrec, who raised the genre of the advertising poster to the level of high art. According to the artist, an advertising poster should stand out from the surrounding space, so you should pay attention to the color - the brighter the better. Thus, A. Toulouse-Lautrec emphasized that a poster is not a book, which means that only a few will stop at it and read it.

Advertising has significantly changed the urban environment. On the streets and squares of European cities (Paris, of course, acted as a trendsetter), special pedestals appeared, decorated with posters and advertisements. As for London, advertising on transport has become widespread here.

Interesting fact:

Advertising in the English "transport" looked like this: billboards reproducing the advertised goods were placed on the carts, in which horses were harnessed, or a poster stand was placed. This structure moved slowly through the busy streets. In the evening, the advertisement was illuminated with lanterns. Of course, it interfered with the passage and the English Parliament in 1850 was forced to ban it, allowing, at the same time, to place advertisements on omnibuses and stagecoaches.

A few more decades passed and at the end of the nineteenth century. “sandwiches” appeared on the streets of London - people with billboards on their chests and backs. The carriers of such advertisements were required to be constantly on the move.

Window displays have become an important component of urban advertising. They appeared as early as the 18th century, when in England they managed to significantly reduce the cost of glass production, but showcases really began to play their role only from the middle of the 19th century. At this time, the possibility of their illumination arose. Initially, this was done with gas, and later with electricity. Craftsmen began to compete among themselves in the art of window dressing. Showcases of toy shops and souvenir shops in Germany were distinguished by a special sophistication.

In the nineteenth century an integral part of advertising becomes a “slogan” - a bright, memorable phrase that serves as the motto of a company or product (a different term has begun to be used in political advertising - a slogan). It is usually three to five words long. The fact is that a slogan consisting of more than seven words does not work. The slogan pushed the hesitant client to make a choice in one direction or another. At the moment when the client made a decision to purchase a product, it was the slogan that played a decisive role in the choice between competing manufacturers.

There is an opinion among experts that the first slogans appeared in England in the 1880s. Even then, they showed their effectiveness in terms of psychological impact on the consumer. For example, Coca-Cola began to pay the most serious attention to slogans, which largely explains the popularity of its products. The first slogan of the famous drink was the bright phrase "Delightful and refreshing." In 1907, an even more effective and effective in terms of sales slogan "Good to the last drop" appeared.

At the end of the nineteenth century. mute appears, and in the 1920s. talkies. As a result, advertisers have received a new advertising medium that has never been seen before in terms of efficiency.

The growing influence of advertising on all sectors of society, its transformation into a social institution, was also manifested in the fact that the state in a number of countries took the first serious measures to legally and ethically regulate advertising activities. Unlike the attempts made in past centuries, they were systematic, as special advertising legislation arose. In addition, the advertising community took steps towards self-regulation, which indicates a fairly high degree of social responsibility of business in those days. Only in the United States at the turn of the century, at least five public associations of advertisers (the "Federation of American Advertising" and others) arose. They set themselves the goal of introducing high ethical and professional standards into advertising practice.

Thus, by the beginning of the global economic crisis that followed the collapse of the New York Stock Exchange, advertising had become a significant social phenomenon, an integral element of the commercial and industrial system. It began to influence the values, ways of thinking and actions of consumers. All this indicated that a new social institution had appeared.

CONTROL QUESTIONS AND TASKS:

What caused the transition from a seller's market to a buyer's market?

G. Schmoller (German economist and public figure)

demand line demonstrates set of maximum prices, under which consumers are willing to buy each given quantity of goods, andsupply line — set of minimum pricesfor which sellers will agree to sell each given quantity of goods.

On fig. 2.12 the demand line cuts the market space into two zones (lower left and upper right).

Buyer it is profitable to make deals only in the lower left zone ( buyer's market), since the demand line shows many maximum prices for the consumer. Prices and volumes above the demand line are not available to the buyer.

On fig. 2.13 the supply line divides the market space into two other zones. AND seller it is profitable to make deals (sell) only in the upper left zone ( seller's market), but unprofitable - in the lower right, because the supply line shows a lot of minimum prices for the seller.

Rice. 2.14. Seller-buyer market

Buyer's market- a market situation in which the supply of producers and sellers of goods exceeds the demand for it at existing prices, as a result of which the prices of the goods are reduced.

seller's market- a market situation in which demand for a product exceeds supply, as a result of which prices rise.

Now let's add Fig. 2.13 to 2.12 and get fig. 2.14, which demonstrates the interaction of supply and demand. It is beneficial for both the buyer and the seller to make transactions only in the AEC zone at the same time. This zone demonstrates all possible exchange situations in this market. This is the market for both sellers and buyers at the same time (the market itself). Any point belonging to the AEC space can express a purchase and sale transaction. At the same time, all points, except one, in the AEC space characterize non-optimal exchange conditions, i.e., such conditions that are more beneficial for one of the parties to the trade transaction. And only point E, which lies at the intersection of supply and demand, illustrates the situation,the most beneficial for both the seller and the buyer at the same time.

Rice. 2.15. Illustration of a static market equilibrium

On fig. 2.15 the point of intersection of the supply and demand line (E) is called balance point(equilibrium - lat.).

Market equilibrium- the situation in the market when demand (D) and supply (S) are in equilibrium, which is characterized by equilibrium price(pe) and equilibrium volume.

Price P* — equilibrium price, i.e., the price at which supply and demand are in equilibrium as a result of market competitive forces.

The volume Q* is called the equilibrium volume i.e., the value of the commodity mass, at which supply and demand are in equilibrium as a result of the action of market competitive forces.

Any movement away from the equilibrium point sets in motion forces that tend to bring the system back to equilibrium. Thus, we can define the equilibrium price as that which, having been reached once, will be maintained in the future. This is true for both equilibrium price and equilibrium volume.

If the price of a product exceeds the equilibrium price (for example, to the level P1), then there will be excess situation commodity products. At this price, the demand of buyers will be 0-Qa, and the supply 0-Qv. Thus, the surplus of marketable products amounted to the value AB or Qa - Qv. However in the conditions of market competition this situation cannot continue for a long time: sellers will begin to reduce the volume of production - the supply of goods and (or) reduce the price of their products. On the other hand, buyers will start to increase their purchases of goods with declining demand. In the end, the economy will return to an equilibrium situation (at price P* and quantity Q*).

Conversely, if the price of a commodity falls below equilibrium, then the situation deficit, equal to the value of CF (Qc - Qf), which, however, will also not be long-term in a competitive market environment.

In economic theory, there are such concepts as a buyer's market and a seller's market. What is each of them?

Buyer's Market Facts

Under buyer's market refers to the situation in the economy when supply exceeds demand. As a result, sellers are forced to lower prices in order to maintain revenue. Moreover, they need to pay close attention to product quality - if it is insufficient, they will purchase goods from competitors.

The buyer's market is most often formed due to high competition or due to insufficiently large segment capacity.

Another reason for the formation of a buyer's market is a decrease in demand for goods due to economic reasons, as well as technological changes in the production of products. If we talk about economic reasons, this is, first of all, a decrease in the purchasing power of citizens, as well as a change in the structure of demand.

With regard to technological change, customers may begin to feel the need to use more advanced (for example, more productive - in the case of electronics) products than those that are supplied to the market, although they were previously satisfied with the latter.

Seller's Market Facts

Under seller's market refers to a situation in the economy in which consumer demand significantly exceeds supply. As a result, sellers get the opportunity to raise prices for products sold.

At the same time, manufacturers often do not pay due attention to the quality of products supplied to the market, since almost any product is sold out. This happens most often due to the desire of suppliers to save on the costs of releasing goods, shipping, processing them and thus receive additional profit.

The seller's market can be formed for various reasons. For example, due to insufficiently high competition or a very large segment capacity. But in the second case, manufacturers, as a rule, still try to monitor the quality of goods and not overestimate prices too much - in order to interest the buyer and increase their market share.

Comparison

The main difference between a buyer's market and a seller's market is the relationship between supply and demand. In the first case, demand exceeds supply, in the second - vice versa. There is also a certain difference in the interaction between the seller and the buyer in each of the considered types of market. In a situation where demand exceeds supply, suppliers can significantly save on the quality of goods offered to customers. In a buyer's market, the quality of goods is usually noticeably higher.

There is a point of view according to which an entrepreneur operating in a seller's market will be more successful than one operating in a buyer's market. This position may seem quite logical - the business will have guaranteed revenue, which, moreover, can always be increased by inflating prices.

Tactically, an entrepreneur can certainly win. But from the point of view of building a long-term business development strategy, taking advantage of the seller's market is likely to play a negative role. The fact is that a firm that is accustomed to the fact that demand exceeds supply (as a result of which it is easy to manipulate quality and prices) may be completely unprepared for any serious competition. In turn, doing business in a buyer's market will require the entrepreneur to quickly adapt to current competition. If he does not have a well-functioning production of goods with high quality, as well as a willingness to work with less profitability, then it will be extremely difficult for him to achieve business success.

Having determined the difference between the buyer's market and the seller's market, we will reflect the main conclusions in the table.

The concept of the market. Market "seller" and market "consumer"

The concept of "transaction" - directly brings us to the concept of "market".

Market- a set of existing and potential buyers of the goods.

seller's market-- this is a market in which sellers have more power and where the most active "market actors" have to be buyers. Buyer's market-- this is a market in which buyers have more power and where sellers have to be the most active "market actors".

A buyer's market is a situation in the market in which the supply of producers and sellers of goods exceeds the demand for it at existing prices, as a result of which the prices of goods are reduced.

A seller's market is a situation in the market in which the demand for a product exceeds supply, as a result of which prices rise.

The tasks of advertising in marketing

The marketing positioning strategy and approach to the formation of the marketing mix predetermine what exactly the advertisement should do as part of an integrated marketing program.

Informative advertising predominates mainly during the marketing phase, when the challenge is to create primary demand. For example, yogurt producers had to first educate consumers about the nutritional benefits and multiple uses of the product.

Persuasive Advertising acquires special significance at the stage of growth, when the firm faces the task of forming electoral demand. For example, Stauffer's "lean cuisine" ad tries to convince weight-conscious consumers that the new dish - despite its low calorie content - looks amazing and tastes great. Part of the persuasive ads is shifting to the category comparative advertising that seeks to assert the advantage of one brand by specifically comparing it to one or more brands within a given product class 4. Comparative advertising is used in product categories such as deodorants, toothpaste, tires and automobiles.

Reminder advertising extremely important at the stage of maturity in order to make the consumer remember the product. The purpose of expensive Coca-Cola advertisements in magazines is to remind people about the drink, and not at all to inform or convince them. reinforcing advertising, which seeks to assure current buyers of the correctness of their choice. Car advertisements often feature satisfied customers who admire one or another feature of the purchased car.