Market concept. Market boundaries (product, territorial, time) and their assessment

Market - totality economic conditions, in which buyers and sellers interact to carry out mutually beneficial trade transactions.

The market is not only a set of existing and potential consumers, but also a complex of interrelated elements - product supply, price and demand .

The most important condition for applying a commercial approach in modern conditions- existence of the market. If there is no free market of buyers and sellers in a society, then no one is interested in studying market demand. If buyers do not yet have a choice when purchasing goods, if quality and price are dictated exclusively by monopolistic manufacturers, then their desires and needs will not be taken into account by anyone. A market exists when people meet directly or through intermediaries to sell or buy goods and services. In a free market, the process of exchange, buying and selling determines who should produce what goods, as well as what and how to buy.

Approaching the concept of the market in more detail, it is possible to note that the market consists of a number of mandatory elements (each of these elements characterizes one side of the market, together they describe its entire complex):

ь buyer (people, groups, organizations) with their own needs;

b availability of sellers willing and able to sell;

ь purchasing power (money);

ь desires (buy);

ь corresponding opportunities (buy).

The following follows from this:

• 1) The importance of understanding the needs and requirements of the buyer, as this leads directly to the act of purchase;
• 2) Sellers must be able to produce goods needed by buyers and be able to sell them;
• 3) The market can expand and contract depending on purchasing power.
• 4) New markets can be created or existing ones expanded by increasing the opportunity to buy through wider distribution.
• 5) Markets can be increased by stimulating the desire to buy through promotion and advertising.

Classification characteristics of the market:

• a) objects of transactions - commodity, legal factors, real estate, financial;
• b) operating conditions - open closed, spontaneous organized, stable unstable, seller buyer;
• c) the degree of localization of transactions - by time, territory;
• d) types of relationships - vertical horizontal;
• e) the nature of interaction between firms - competitive non-competitive

Understanding the market as a sphere of circulation predetermines the need to set its external parameters. In regulatory legal acts, such parameters are determined through geographical and product boundaries.

Market product boundaries are understood as a group (set) of interchangeable goods. Determining the product boundaries of a market is a procedure for determining a product (its consumer properties), substitute products and forming a product group (a group of products whose markets are regarded as one product market). The basis for determining product boundaries is the opinion of buyers about the interchangeability of products.

Geographical (territorial) boundaries of the market - This is the territory in which buyers can purchase this product and do not have such an opportunity outside it. Geographic boundaries are determined by economic, technological and administrative barriers that limit the ability of some buyers to purchase a given product in the territory in question.

When determining geographical boundaries, many factors are taken into account, in particular:

• 1) the possibility of moving goods between territories;
• 2) availability vehicles to move the buyer to the seller;
• 3) the absence of administrative restrictions on the import or export of goods in the given territory;
• 4) a comparable level of prices for relevant goods within the boundaries of this market.

According to the criterion of geographical boundaries, the market can be divided: local, regional, interregional, all-Russian.

Market boundaries

I. grocery - substitutability in consumption

II. temporary - duration of consumption period, presence of entry barriers

III. local - intense competition, presence of barriers to entry

The market structure is characterized by quantitative and qualitative indicators. Quantitative indicators are:

• 1) the number of sellers operating in this market;
• 2) shares occupied by sellers in the market;
• 3) indicators of market concentration.

Quality indicators include:

• 1) the presence or absence of barriers to entry into the market for potential competitors, the degree of their surmountability. In this case, potential competitors can be considered business entities that:
  • a) have the material and technical base, personnel and technology to manufacture this product, but for various reasons do not realize these capabilities;
  • b) manufacture this product, but do not sell it in the territory of this commodity market;
• 2) openness of the market for interregional and international trade.

Comparison and analysis of quantitative and qualitative indicators characterizing the structure of the market makes it possible to determine its type. Thus, market types are distinguished depending on:

• a) on concentration (highly concentrated, moderately concentrated and low concentrated markets are distinguished);
• b) on the development or underdevelopment of the condition competitive environment. Determining the boundaries, structure and type of market is necessary for the relevant government agency to develop a system of measures aimed at regulating it in order to maintain a competitive environment and create conditions for satisfying the demand and supply of entities.

Time boundaries are also highlighted. The main time limit is the calendar year. The planning process for the next year takes place from September to December. Planning and reporting, including fiscal, are carried out synchronously - according to the calendar year. Changes in the current plan are reflected in additions to the current plan, control actions are carried out according to deviations. The year is divided into quarters, quarters into months. For large assembly lines and large assembly plants, weekly, daily and hourly schedules are prepared. It is important to remember that the bulk of the work on drawing up schedules for production departments was previously developed manually and, if you imagine that the plan changed significantly during the year (quarter, month), then changing schedules was not an easy job.

IN managerial work planning occupies one of the main places. The role of the planning process is greater, the greater the uncertainty in demand, both internal and external. Good organization The planning process may well be considered the key to the success of the enterprise. One of the most important criteria for good planning is the correct determination of time boundaries. By establishing time boundaries, management brings strict order to the planning process for all departments. At the same time, by changing time boundaries, management manages the planning process as required by the market. Learning to manage the planning process and correctly using time boundaries in planning means learning to effectively manage an enterprise and its activities.

Market assessment, determination of volume and share occupied individual enterprises, is main task market research.

Practice marketing research shows that this information is currently of great interest to the company.

In most cases, market assessment is carried out according to the following plan:

• 1. Analysis of supply and demand and its development trends:
  • - assessment of the magnitude and structure of current actual demand / supply (total and by components)
  • - prospective assessment of supply and demand in the market (general trends / segmentation)
• 2. Analysis of market structure, segmentation, analysis of sales forms and methods.
• 3. Study of the level and conditions of competition in the selected market.
• - assessment of the competitive environment (circle of main competitors, strategic plans of competitors, tactics and strategies of activity).
• - SWOT analysis; STEP analysis; business environment profiling.

Knowledge of these indicators is necessary both to expand the market share of a particular company and to penetrate the market of a new company or brand.

Industry defined as a set of enterprises that produce similar products and use similar resources and technologies in their production. Industry market- a set of enterprises that produce products similar in consumer purposes using similar technologies and production resources and compete with each other for the sale of their products on the market. The industry market, in fact, is a synthetic concept that combines the concepts of market and industry.

When defining a market, it is important to define its boundaries. It is customary to distinguish the following main types of market boundaries:

1) product boundaries, reflecting the ability of goods to replace each other in consumption;

2) time boundaries, characterizing the time interval under study, as well as the boundaries of operation of the product being sold;

3) local (spatial) boundaries, determining the geographic location of the market.

There are many factors (often the driving forces of an industry) that determine the economic boundaries of an industry, the effect of which will depend on the specifics of the industry:

The most common factors include:

1) Change in the long-term growth rate of the industry. A sharp increase in long-term demand and the expansion of boundaries attracts new firms to this market of goods and services. This is the reason for industry changes, because... they influence:

On the balance between industry supply and purchasing demand;

Market structure;

Intensity of competition;

Changes in the composition of buyers and methods of using this product. These changes represent the reason for changes in consumer requirements for service, the creation of other or modification of previous sales channels, expansion or narrowing of the range of products that are produced, increase or decrease in the required channel, changes in marketing tactics;

2) introduction of new products. Reintroducing a product can expand the market, stimulate growth in demand, and increase the degree of differentiation among competing sellers. When a market is characterized by the rapid diffusion of a new and improved product, industry product renewal is a key driving force;

3) change in technology. Frequent and important technological innovations in production methods can greatly change unit production costs, the size of investments, the minimum effective size of production, cause a tendency towards vertical integration, and increase the value of the product life cycle effect;

4) introduction of new trading methods (marketing). If a company introduces new effective methods trade, then their efforts are rewarded with an explosion of purchasing interest, an increase in demand for industry products, and so on, which can significantly affect the conditions of competition and the positions of rival firms;

5) entry or exit of large firms. The arrival of a big newcomer can result not only in a game with new key players, but also in a game with new rules. The departure of a large firm from a given industry also leads to a change sectoral structure due to the reduction of leading companies and the division of consumers:

6) dissemination of technological know-how. If there is no strong patent protection for new technologies, rapid diffusion of firms' own technological advances is possible;

7) growing globalization of the industry;

8) changes in costs and efficiency;

9) occurrence consumer demand for a differentiated product;

10) the impact of regulations and government policy changes;

11) changes in public attitudes and lifestyles;

12 reducing the degree of uncertainty and business risk.

IN practical research to determine market boundaries requires the application of certain criteria for classification individual markets of one or another product to the analyzed market.

IN antimonopoly committees Many countries use the following definition given by Joan Robinson to define market boundaries.

The market brings together firms if they produce goods that are close substitutes from the buyer's point of view. In this case, firms are competitive in the same market. An indicator that measures the presence or absence of a substitute is cross elasticity coefficient.

Cross price elasticity of demand shows the relative change in the quantity demanded of one good with a relative change in the price of another good. The most commonly used formula is:

If the cross elasticity coefficient E > 0, then the product is interchangeable. When the price of one good increases, the demand for another, interchangeable good increases.

If E< 0, то товар является взаимоопыляемым. При повышении цены на один товар, происходит падение спроса на другой товар, взаимоопыляемый.

If E = 0, then such goods are independent; an increase in the price of one product does not affect the volume of demand for another product.

If, when the price of good A increases, many consumers replace it with good B, then goods A and B must be assigned to the same market. A visible qualitative gap in the chain of substitute goods forms the boundaries of the market for a particular product. As soon as the cross elasticity becomes less than a certain specified value, we can talk about a break in the chain of commodity substitutes, and therefore about the market boundary. Thus, by changing the cross-elasticity values, we can set different market sizes.

An industry unites firms if they sell goods that are close substitutes from the manufacturer's point of view. The interdependence of manufacturing firms of a product can be assessed using the coefficient of cross elasticity of the price of a given product based on the volume of production of a substitute product. Substitution in production means that workers with similar qualifications and similar equipment are used. The ratio reflects how quickly firms can switch to producing a new product using existing capacity without additional investment.

The higher the value of the cross-elasticity coefficients under consideration, the higher the homogeneity, and, consequently, the interchangeability of goods, the higher the interchangeability of manufacturing firms and their competition.

Not all potential substitutes should be assigned to the same market. If you arrange products of the same class in ascending order of cross-elasticity values, a sharp break in the chain of subjects will indicate the presence of a relevant market.

In countries European Union In addition to the specified criterion for determining market boundaries, the following are also used.

1. Indicator of change in revenue when price changes. This indicator based on the concept of direct price elasticity. The market for the products under study is understood as the market for such goods that are sensitive to price changes. If, as the price of the product under study increases, sales revenue decreases, then this product has a close substitute, which must be taken into account when defining the market; if sales revenue does not decrease, then there are no close substitutes, and the boundaries of the market are defined quite fully.

2. Correlation of commodity prices over time. A positive correlation between the movement of prices of goods over a long period of time indicates that the goods are stable substitutes, that is, they constitute one market. This criterion is based on the concept of cross price elasticity. If goods A and B are close substitutes, an increase in the price of good A will lead to an increase in the demand for good B and, as a result, an increase in the price of good B.

3. Geographical limitation of the market. As a criterion for different territories to belong to the same local market, the same conditions of competition are identified, such as the interconnectedness of demand, the presence of entry barriers, differences in prices, transport costs, etc.

Also in practical analysis It is important to determine the enterprises included in the industry market under consideration. For this, two main indicators are used:

1) specialization indicator, reflecting the share of sales volume of the product under study in the total sales volume of all enterprises assigned to the industry market under study;

2) coverage rate, reflecting the share of the sales volume of all enterprises that we classified as part of the industry market under study in the total sales volume of the product under study.

For high adequacy of the study, these indicators must be large enough.

Defining boundaries industry market allows you to evaluate company size relative to the size of the market in which it operates. To do this you can use the following main indicators:

Market share of the firm's sales;

Share of people employed in this enterprise;

Share of the firm's book value;

The share of added value created at a given enterprise.

Notes

consider in more detail the criteria for determining market boundaries

Five percent rule;

Correlation of commodity prices over time

Definition of a geographically limited market;

One of the most complete definitions of the commodity market is given in the Law “On Protection of Competition”: “The commodity market is the sphere of circulation of goods (including foreign-made goods) that cannot be replaced by another product, or the sphere of circulation of interchangeable goods, within the boundaries of which (including geographical ones) based on economic, technical or other feasibility or feasibility, the purchaser can purchase the goods, and such possibility or feasibility does not exist outside its boundaries.”

Thus, the criteria for a relevant market are considered to be product (product) and geographic boundaries, within which for a particular entity market relations relations between competition and monopoly emerge.

1. Product market boundaries.

Identifying the product boundaries of a market is a procedure for determining: a product (its consumer properties), substitute products, a product group (a group of products whose markets are regarded as one product market).

The determination of the product under study is carried out according to indicators, the composition of which is differentiated depending on the type and purpose of the product:

Consumer properties of the product- a set of technical, economic and aesthetic properties that are recognized or (as expected) will be recognized by consumers as beneficial properties. The consumer properties of a product are formed due to such characteristics as reliability, strength, external design, finishing, novelty of style, fashionability, etc., which make it different from other products.

From the buyer’s perspective, the product satisfies or does not satisfy a very specific need, which significantly affects the product boundaries of the market. For example, transportation of passengers and transportation of passengers public transport- these are two different needs that form two different markets. Moreover, it should be noted that the need can be satisfied with the help of goods that have different consumer properties, but the same utility.

In addition, the product in relation to which the boundaries of the market are determined, as well as the structure of the market, is a product of activity that is sold as a single whole. And it is precisely that set of products of activity, which is sold as a single whole and for which a single price is set, that is the product in question, forming the product boundaries of the market.

For example, if the delivery service is included in the mandatory kit and delivery cost, then this particular kit - the product and the service for its delivery - should be considered as a product. If the product and service are not included in the same package, then these two goods are considered to operate in different markets. Thus, a product as a good has many dimensions, the totality of which allows us to identify the good itself.

Conditions (methods) for selling goods influence the composition of sellers and buyers, and are associated with satisfaction to a certain extent different needs. For example, when selling on wholesale and retail markets, the requirements for the packaging of a product and its price are different, therefore different methods of selling a product determine different industry markets.

All characteristics of the product market are assessed for one condition (method) for the sale of goods or for conditions (methods) for the sale of goods that can be considered interchangeable. Those that do not lead to a significant change in the geographic boundaries of the market or the composition of sellers and buyers can be considered interchangeable methods of selling goods. It is assumed that the composition of buyers, with correctly defined boundaries of the product market, is practically preserved or changes in this composition can be neglected if the selling price of a unit of goods changes by no more than 5 = 10%.

Thus, wholesale and retail are fundamentally different ways of selling goods, since they entail a significant difference in unit prices products sold, within the geographical boundaries of markets, in the composition of sellers and buyers.

The definition of product boundaries of the market should be based on the opinion of buyers about the interchangeability of goods that make up one product group. Identification of substitute goods included in a defined product group is carried out according to the criterion of interchangeability, of which there are two types: interchangeability in demand and interchangeability in consumption.

Two goods are interchangeable in demand if a significant number of buyers are willing to replace these goods with one another when prices (quality) change relative to each other. Such buyers are called “marginal consumers.” To clarify this aspect, it is necessary to conduct consumer surveys and collect price data.

Two goods are substitutes on supply if producers are willing and able to quickly (for example, within one year) switch from producing one product to producing another without making significant sunk costs.

When the definition of market boundaries from the point of view of demand does not coincide with the establishment of market boundaries from the point of view of supply, then in such cases a broader definition of the boundaries of the product market is chosen.

One of the criteria for the interchangeability of consumer goods is the indicator of cross-price elasticity of demand. In practice, they also resort to more accessible and less labor-intensive methods for assessing the interchangeability of goods - expert assessments, interviews with customers and specialists.

In the countries of the European Community, other criteria for identifying a market are used, namely the indicator of changes in revenue when prices change, as well as the correlation of product prices over time.

Indicator of change in revenue when price changes.

For example, if, with an increase in the price of product A, revenue has increased (or, accordingly, the additional profit of sellers is positive), the market is limited only to this product. If revenue has decreased (the additional profit of producers is negative, or at least non-positive), then, consequently, there is a close substitute, product B. Therefore, it is inappropriate to talk about the market for product A; we must look for product B and check again using the proposed method the market for product A + B. Thus, the dynamics of revenue and profit of manufacturing firms with a long-term increase in prices indicates the boundaries of the market. This criterion is based on the principle of direct price elasticity.

Correlation of commodity prices over time.

A positive correlation between the movement of prices of goods over a long period of time (5-10 years) indicates that the goods are stable substitute goods, that is, they form one market. It can be noted that this criterion, like the definition used by Joan Robinson, is based on the concept of cross price elasticity.

2. Time boundaries of the market.

The choice of the time interval for the functioning of the market for which the corresponding characteristics are determined depends on the purposes of the study, but should not be less than one year. When determining time limits, one should take into account the regularity of deliveries, that is, how evenly the product arrives and whether it is constantly present on the market. If sporadic deliveries are noted, then it is necessary to decide whether this is due to the seasonal nature of the product market or indicates the presence of barriers to entry. If the product in question has seasonal production or sales, it is necessary to consider an interval of two years.

The analysis is subject to not only the existing industry market, the characteristics of which are determined for the retrospective period, but also the prospects for 1-2 years of development of this market, taking into account the influence of various factors on the market.

3. Geographical boundaries of the industry market

The geographic boundaries of an industry market define the territory in which buyers from a selected group have the economic opportunity to purchase the product in question, and sellers to sell this product or its close substitutes, and do not have such an opportunity outside this territory. The criteria for the presence or absence of the possibility of purchasing (selling) a product is not the physical opportunity as such, nor the availability of financial resources, but the choice of the consumer (seller) within the framework of those financial (budget) and other types of restrictions. In practice, antimonopoly authorities often a priori identify the geographical boundaries of markets with the boundaries of administrative territorial entities, which has an impact negative impact to assess the level of concentration and identify the dominant position of companies in the market.

Establishing the geographical boundaries of markets depends on at what stage of the reproduction process (production or sphere of circulation) the relationships between economic entities are considered. When a product moves from the sphere of production to the sphere of distribution relations, the intersection points of the economic interests of the subjects of the reproduction process change and, as a result, the geography, structure and parameters of the market change. Thus, the geographical boundaries of the market are determined for a specific product, established product boundaries of the market, time interval and method of selling the product.

The belonging of different territories to the same geographic market is influenced by the interconnectedness of demand, the presence of customs barriers, institutional restrictions, national (local) preferences, differences (significant / insignificant) in prices, transport costs, substitutability of supply, transaction costs.

When identifying the geographical boundaries of the market, the following factors are taken into account:

The ability to move demand between territories presumably included in a single geographic market, that is, the availability of vehicles to move the buyer to the seller;

Insignificance of transport costs for moving the buyer to the seller: with significant differences in the cost and consumer qualities of goods and the levels of profitability of operations in commodity markets, these values ​​may differ from each other and fluctuate within 5-10%.

Thus, territories in which the cost of goods with delivery fluctuates within acceptable limits for the consumer can be combined into one geographical market. In world practice, it is customary to take, as the limit of maximum distance, the place of purchase of goods from the consumer’s location, the limit of a five percent increase in the price of goods with delivery compared to the price of goods purchased close to the consumer. For Russian conditions the five percent threshold unjustifiably narrows the geographic boundaries of the market, which requires clarification from buyers.

A narrowing of the contingent of buyers (sellers) due to various factors will lead to their reorientation to another product market, or to a reduction in demand, which may result in a reduction in the capacity of the market in question and (or) a change in its geographical boundaries.

The possibility of moving goods between territories supposedly included in a single geographical market is ensured subject to:

Insignificant additional costs for transporting goods from the seller to the buyer;

Preservation of the level of quality and consumer properties of the product during its transportation;

Absence of administrative restrictions on the import or export of goods in this territory;

Comparable price levels for relevant goods within the boundaries of this market.

The geographical boundaries of the market are associated with the interchangeability of supply and demand.

Demand substitutability means that producers (suppliers) located in different regions are considered to operate in the same geographic market if the ability of each of them to increase prices is limited by the ability of consumers to switch to purchases from other producers (suppliers).

Supply-side substitutability means that two regions are considered to be part of the same geographic market from a supply point of view if the supplier supplying one region is able to quickly and without significant sunk costs switch to supplying the other region.

Thus, the set of buyers of different geographic markets practically does not overlap, which cannot be said about the set of sellers. One salesperson may operate in multiple geographic markets.

It is impossible to imagine any market in modern conditions without interregional (international) integration and exchange. As a result, when assessing concentration-relevant variables, it is necessary to take into account competitors foreign companies or business entities from other regions. Assessing the openness of the market for the entry of sellers from other regions significantly reduces market concentration and reduces the share occupied by local producers operating in the market.

Algorithm for determining the geographical boundaries of a product market:

1. Determine the list of producers of interchangeable goods.

2. For each commodity producer, determine the addresses of the wholesale or retail sales goods.

3. Separate groups of suppliers operating in the wholesale and retail markets. Determine which markets, wholesale or retail, will be considered. If wholesale markets are studied in the future, then suppliers with only retail sales should be excluded.

4. The addresses of wholesale (retail) sales of goods of commodity producers approximately determine the location of the first wholesale (retail) commodity markets.

5. From the possible locations of wholesale (retail) markets, one is selected and a geographic market is determined for a previously determined seller who operates at this address.

6. The composition of other sellers operating in this geographic market is determined. If the list of sellers is exhausted, then the geographical boundaries of the market are considered to be determined. As a result, one or more markets for interchangeable goods located in the area of ​​previously established delivery addresses must be identified, and the composition of sellers of goods in these markets.

Peculiarity Russian markets is the presence on the territory Russian Federation along with the “federal” ones, a number of territorially closed markets for interchangeable products, which is determined by: the significant spatial extent of the territory of the state, which entails increased requirements for communication routes and conditions for transporting goods, the cost of their transportation; poor development of communications; weak competition between modes of transport; high cost of cargo transportation; low population density in a significant part of the Russian Federation.

Markets are classified based on their geographical boundaries:

1. Local or local market- this is a market for a certain product (group of interchangeable goods), characterized in that the conditions for comparability of price levels and approximately equal opportunity to purchase goods from different sellers are met in territories where there is demand for the goods in question, within the administrative boundaries of one municipality.

That is, the purchase of goods in another municipality for persons living in the territory of the first municipality leads to an increase in prices for goods that are too significant for them, taking into account delivery. But it should be noted that the geographical boundaries of the local (local) commodity market do not necessarily and do not always coincide with the administrative boundaries of the municipality, but lie within these boundaries.

2. Regional commodity market - This is a market for a certain product (a group of interchangeable goods), characterized by the fact that the conditions for comparability of price levels and approximately equal opportunity to purchase goods from different sellers are met in territories where there is demand for the goods in question, within the administrative borders of one constituent entity of the Russian Federation.

3. Interregional commodity market - this is a market for a certain product (group of interchangeable goods), characterized by the fact that the conditions for comparability of price levels and approximately equal opportunity to purchase goods from different sellers are met in territories where there is demand for the goods in question, within the administrative boundaries of two or more (but not all) entities Russian Federation.

It is necessary to distinguish between an interregional market and an interregional flow. Interregional trade flow is characterized by the movement of goods between the relevant territories, while consumers do not have the opportunity to purchase goods in all territories covered by the exchange of goods at a price with delivery that does not exceed the barrier to the profitability of the purchase.

4. Federal Commodity Market - This is a market for a certain product (a group of interchangeable goods), characterized by the fact that the conditions for comparability of price levels and approximately equal opportunity to purchase goods from different sellers are met in territories where there is demand for the goods in question, within the state border of the Russian Federation.

5. World commodity market - This is a market for a certain product (a group of interchangeable goods), characterized in that the conditions for comparability of price levels and approximately equal opportunity to purchase goods from different sellers are met in all territories where there is demand for the goods in question. That is, there are no countries in which any buyer from any country could not purchase a product or its purchase would not be approximately equally profitable at any point of sale.

6. Intercountry commodity market - This is a market for a certain product (a group of interchangeable goods), characterized by the fact that the conditions for comparability of price levels and approximately equal opportunity to purchase goods from different sellers are met in territories where there is demand for the goods in question, within two or more, but not all (unlike world market). That is, the purchase of goods in other territories not covered by the geographical boundaries of the intercountry commodity market leads to a too significant increase in prices for goods, taking into account delivery.

The presence of a world market excludes the existence of national markets for the same product. Cross-country commodity markets do not exclude the simultaneous existence of other geographical markets for the same product, in particular national (federal), regional, etc.

Determination of the composition of sellers and buyers in the industry market.

Within the identified boundaries of the market, the composition of sellers and buyers is determined, depending on at what stage of the reproduction cycle (production or sphere of circulation) the economic relationships of the subjects are considered. Participants in the commodity market can be both producers of goods and services, and trade and intermediary enterprises that, in addition to purchase and sale operations, carry out a wide range of other trade and intermediary services.

Wholesale and retail trade are technologically and substantively different ways of selling goods, which determines the different composition of sellers and buyers, different product and geographical boundaries of the market.

The subjects of the commodity market are sellers independent of each other and buyers independent of each other. If there is economic dependence of business entities, a group of persons should be considered as a seller. To determine a group of buyers, the criterion is used that each buyer can purchase a product from any of the sellers selling the product on a certain market.

Goods - any subject of economic turnover, including products, works, services, documents confirming obligations and rights (in particular securities)

(Extract of Article 1 "Definition of terms" of the Law of Ukraine "On the Protection of Economic Competition" Adopted by the Verkhovna Rada of Ukraine 11012001 N 2210-III)

. Compiler's note. The same wording is contained in. P13 "General provisions" "Methods for determining the monopoly (dominant) position of business entities in the market" Approved by order. Antim of the Monopoly Committee of Ukraine dated 503 2002 N 49-r Registered in. Ministry of Justice of Ukraine 1042002 rubles for N 317/6605їн 1.04.2002 rubles. for N 317/6605).

Goods - a product of activity (including works, services, as well as securities) intended for sale

(Extract of Article 1 “Definition of terms” of the Law of Ukraine “On limiting monopolism and preventing unfair competition in business activities” Adopted by the Verkhovna Rada of Ukraine 18021992r N 213 32-KhII 02/18/1992r. N 2132-ХІІ).

Product market boundaries

Commodity boundaries of the market - a product (commodity group), a set of similar, homogeneous items of economic circulation, within which the consumer, under normal conditions, can move from the consumption of a certain type of item of economic circulation to the consumption of another.

(Extract from P13 "General Provisions" "Methods for determining the monopoly (dominant) position of business entities in the market" Approved by the order of the Antimonopoly Committee of Ukraine dated 503 2002 2r N 49-r Registered with the Ministry of Justice of Ukraine 1042002r for N 317/6605 and 1.04.2002r . for N 317/6605).

Concerted action

Concerted actions are the conclusion of agreements by business entities in any form, the adoption of decisions by associations in any form, as well as any other coordinated competitive behavior (activity, inaction) of business entities. Concerted actions are also the creation of a business entity, association, the purpose or consequence of the creation of which is the coordination of competitive behavior between government entities that created the specified business entity, association, or between them and a newly created business entity, or entry into such an association.

(Extract of Article 5 “Concerted Actions” of the Law of Ukraine “On the Protection of Economic Competition” Adopted by the Verkhovna Rada of Ukraine 11012001 N 2210-III)

Participants in the concentration of business entities

Concentration participants are:

business entities in relation to which a merger or accession is being carried out or is to be carried out;

business entities that acquire or intend to gain control over an enterprise, and business entities in relation to which control is acquired or acquired; business entities whose assets (property), shares (shares, shares) are acquired into ownership, received for management (use), rent, leasing, concession or are in possession, and their buyers (recipients), acquirers

business entities that are or intend to become founders (participants) of a newly created business entity. If one of the founders is a body executive branch, a body of local regulation, a body of administrative and economic management and control, an enterprise whose assets (property), shares (shares, shares) are included in the statutory fund of the newly created business entity is also considered a participant in the concentration;

physical and legal entities, associated with the participants in the concentration specified in paragraphs two to five of this article, control relations, which gives grounds to recognize the corresponding group of persons in accordance with the article. Teyu 1 present. Law as a single business entity.

(B. 23 "Participants in the concentration of business entities" of the Law of Ukraine "On the Protection of Economic Competition" Adopted by the Verkhovna Rada of Ukraine 11012001 N 2210-III)

Market time boundaries

Temporary boundaries of the market - the time of market stability, that is, the period during which the structure of the market, the ratio of supply and demand on it do not change significantly

(Excerpt from P13 "General Provisions" "Methods for determining the monopoly (dominant) position of business entities in the market" Approved by order of the Antimonopoly Committee of Ukraine dated 503 2002 2 N 49-r Registered with the Ministry of Justice of Ukraine 1042002r for N 317/6605ni 1.04.2002 rub. for N 317/6605).

The application of competition law is only possible with strict definition of market boundaries.

According to the Law on the Protection of Competition, the product market (product market) is the sphere of circulation of goods or interchangeable goods for which there is supply and demand for a certain time and within a certain territory. The commodity market is part of the reproduction process and covers the sphere of circulation of goods (works, services), as a result of which, at a certain time and within certain territorial boundaries, the latter pass from the manufacturer (seller) to the buyer (recipient).

The key to understanding the boundaries of a particular product market is the concept of “interchangeability”. Moreover, depending on the demand of a particular consumer, the limits of interchangeability can vary significantly. Product boundaries of the market are determined by forming a group of interchangeable goods(product groups), within which a consumer under normal conditions can easily move from the consumption of one product to the consumption of another.

The formation of a group of interchangeable goods (product groups) is carried out from a list of goods that, according to indicators of interchangeability, have for sellers (suppliers, manufacturers), buyers (consumers, users) the characteristics of one (similar, analogous) product (product group). They, in particular, have similarities in purpose, consumer properties, conditions of use; similarity of physical, technical, operational properties and characteristics, quality indicators, etc.; the presence of a common group of consumers of the product; no significant difference in prices; interchangeability of goods (product group) from the point of view of production, that is, the ability of manufacturers to offer new goods to replace those that exist.

In the process of determining the product boundaries of the market, a predetermined group of interchangeable goods (product groups) can be divided into several subgroups or attached to a second group.

When conducting research, it is necessary to take into account that interchangeable goods belong to a group of homogeneous goods (product groups), which are considered by the consumer as the same product (product group) and which can be standardized or differentiated.

How standardized goods(product groups) goods that have unified system indicators, parameters characterizing the product, and in the production of which uniform or identical technical standards are used, technical specifications, application standards, etc.

Differentiated Products(product groups) are characterized by certain differences in consumer properties, appearance, quality indicators, terms of use, volumes additional services(maintenance), which allows consumers to appropriately distinguish the advantages of a specific product (product group), which is produced (sold) by a certain enterprise (seller), from other similar products (product groups) when meeting the corresponding demand.

Substitute goods included in a certain product group are found to be based on the criterion of interchangeability of commercial products. One of the criteria for interchangeability in consumption is the cross price elasticity of demand, calculated as the ratio of changes in the volume of sales of goods LP as a percentage for a certain period:

Product demand P with an increase in the price of a product, P can both increase and decrease depending on the buyer’s attitude to the overall use of both goods. So, cross elasticity can be both positive and negative. With a positive cross elasticity coefficient (E> 2) goods P and R are easily replaced from one to another, and the higher the coefficient, the greater the degree of interchangeability of goods.

If 0 ≤ E≤ 2, then there is an insignificant probability of replacing one product with another. Negative elasticity (E<0) is typical for goods that complement each other in the process of consumption, for example, at a certain point in time, the price of white bread increased in the region from 1 UAH. 20 kopecks (P 1) up to 1 UAH 32 kopecks (P 2):

At the same time, the total sales volume (in the region) of bread made from 1st grade flour increased from 700 thousand kg to 910 thousand kg

Therefore, with the value E> 2 white bread can easily be replaced with first grade bread.

If supply and demand are unbalanced in the market, calculations of cross-elasticity coefficients in some cases may lead to distorted results.

To assess the interchangeability of goods in production, it is necessary to take into account the availability of free production capacity that can be used to produce one of the goods included in a given product group, or the technological capabilities of switching production capacity to produce a given product group.

Territorial (geographical) boundaries of the market are the territory with the sphere of relations between the purchase and sale of goods (groups of goods), within which, under normal conditions, the consumer can easily satisfy his demand for a certain product and which can, as a rule, be across the territory of the state, region, district, city, etc. or parts thereof.

The territorial (geographical) boundaries of the market for a certain product (product group) are determined by establishing a minimum territory beyond which, from the consumer’s point of view, the purchase of goods (product group) that belong to the group of interchangeable goods (product group) is impossible or impractical. In this case, in particular, the following criteria must be taken into account: physical and technical characteristics of the product (product group); technological connections between producers and consumers; possibilities of technical, warranty, subscriber service; price ratio, in particular the level of price ratio for certain goods (product groups) within this market, acceptable for producers or consumers; opportunities to move demand for a product (product group) between territories that are part of the same geographic market, in particular the ability to maintain the level of quality and consumer properties of the product (product group) during transportation; the level of transportation costs, including the features of transportation of goods (product group).

In addition, significant factors determining geographical boundaries are: the availability of retail and warehouse premises, ease of loading and unloading operations, and the ability to perform pre-sale preparation; availability of signs for goods and services; the presence in the relevant territory of barriers to the export or import of goods (product groups), namely: administrative barriers; economic and organizational restrictions; impacts of vertical (horizontal) integration; barriers associated with the effect of scale of production; barriers based on the absolute predominance of the level of costs; barriers related to the amount of capital expenditure or investment required to enter a particular product market; demand side constraints; environmental restrictions; barriers preventing free exit from the market, etc.; location of specific consumer groups; the price level for certain goods (product groups) in adjacent territories, the possibility of moving the supply of goods (product groups) between these territories.

When finalizing the territorial (geographical) boundaries of the market, the determining factor is the lesser ability to move either demand or supply.

The correctness of determining the territorial (geographical) boundaries of the commodity market can be verified by studying the openness of the market regarding interregional and/or international trade.

The degree of market openness (hereinafter - SVR) for international, interregional trade is assessed by an indicator that is calculated as the percentage of the total volume of imports of goods into a certain market from the territories of other regions of the country (other countries) to the total market volume according to the formula:

where Qv is the volume of goods imported into the corresponding market from outside this market (for the national level, the volume of imports into Ukraine).

For example, consider the degree of market openness when part of the goods is imported from outside area B, but imports constitute an insignificant part of the total market volume - about 10%. If SVR<30%, следовательно, границы рынка хлеба и хлебобулочных изделий определены пределами области Б. Если же ввоз муки в область Б из соседних областей составляет более 30%, то территориальные границы этого товарного рынка могут быть определены как межрегиональные.

Commodity and territorial boundaries operate simultaneously with the market schedule and are defined as a period of time (usually a year) during which a given set of commodity-money relations between sellers (suppliers, producers) and consumers forms a product market with a constant structure.

In cases where the period of complete turnover of the advanced capital in the production of the relevant product exceeds one year, the time boundaries of the market are usually defined as a period of time equal to one to three designated periods of capital turnover.

In practice, a situation arises when a period of time of less than one year can be recognized as a market schedule. However, the following conditions must be met: firstly, the period of full turnover of the advanced capital in the production of the corresponding product is significantly less than one year; secondly, during this time, in response to a significant increase in prices on the market, sellers (suppliers, manufacturers) have the opportunity to take appropriate measures and stabilize supply, and a significant number of consumers who have reduced consumption as a result of this increase can restore consumption volumes without significant difficulties; thirdly, the monopoly (dominant) position of a business entity (entities) is determined by the provision of special rights, powers, benefits to it by government bodies, local governments or administrative and economic management and control bodies or other business entities occupying a monopoly (dominant) position .

Question 4. Barriers to entry(English) Barriers to Entry) - economic and technical factors that do not allow or complicate the entry of new companies into the market or industry, in order not to create additional competition for existing companies.

Barriers to entry limit competition and is the source of a company's pricing power—the company's ability to raise prices without losing customers.

Term barriers to entry also applies to individuals who intend to start a certain professional or business activity.

Examples of barriers to entry into the labor market for individuals include education, licensing, or quotas for the number of workers in a particular occupation.

On the one hand, these barriers are to ensure that people who enter this market have the necessary qualifications, on the other hand, it reduces competition in the market. Also because of this, there is an effect of additional cost for professionals in certain fields.