Types of Market

This lesson is designed to be used in the classroom or as a homework task to support the teaching and learning of Types of Market in BTEC Business.

Types of Market

This resource is designed specifically for Unit 30 of the Edexcel BTEC National qualification, 'Business and the Economic Environment'.

Aim:

The aim of this resource is to develop your understanding of the types of market that exist in business. By the end, you should be able to:

  • Understand the different types of market
  • Understand that markets can take place anywhere
  • Understand that markets are vital to businesses
  • Investigate how prices move in commodity markets

Resources:

Activity:

Task 1

The following links are all examples of markets.

Carry out research into each of the markets, then create a table to show the following:

  1. The market's name
  2. How long the market has been in existence
  3. The type of market (consumer, commodity, capital, industrial)
  4. Whether buyers and sellers meet at the market


Task 2

Coffee

Image copyright: Lotus Head, stock.xchng

The commodity market for coffee is renowned for the volatility of its prices over recent years. Wildly fluctuating prices affect buyers and sellers alike. Price rises can be caused by restrictions to the supply of the commodity:

  • through bad weather affecting harvests
  • or by suppliers cutting production deliberately

On the other hand, there can be pressure on prices to alter as a result of pressure from buyers. This tends to send prices lower and keep them falling.

The Web site of the International Coffee Organisation
(http://www.ico.org/) can be used to access a five-year record of price movements in this commodity market. Go to 'Coffee Crisis' under 'About Coffee' to find out more.

Biz/ed's Business Profiles include Cafédirect
(http://www.bized.co.uk/compfact/cafedirect/cafeindex.htm), a Fairtrade coffee supplier.

Now try to answer the following questions:

  1. How have average coffee prices moved in the past five years?
  2. What effects could have resulted from this?
  3. What's to stop coffee growers asking for higher prices?
  4. How else can farmers seek higher standards of living?
  5. Now go to the 'Coffee Prices' under 'Statistics' and find 'Monthly Averages' data for the period covering 2003 to 2005. What has happened to coffee prices in recent months? Can you think of any possible reasons for the price recovery?