One cannot start talking about business of any kind without knowing what a market is and what an industry is. Using these two terms interchangeably in front of people with experience in the field could even cost you a good business opportunity. Scared? Then at least we have got your attention. Keep reading and make sure you never make a mistake again when it comes to the difference between market and industry.
|A place where sellers and buyers come together.||A gathering of top producers of a specific type of product.|
|Is created by demand.||Is created by producers.|
|Is regulated by institutions to make sure that trade is done fairly to the buyers.||Issues regulations to ensure the best conditions for production.|
|Once demand is gone, there is no more market for a product.||Without a market for a product, there is no industry either.|
A market is an economic concept that defines the connections established between a product or service and specific consumers. We talk about a “market for x (product)” in the context of there being demand for x. There are institutions protecting the interests of consumers and regulating both business activity on the market and the behavior of market actors. Just like in a physical market, there is competition, promotion and, most importantly, purchase.
Every product and service has a market in which it competes with similar products and services. Consumers are won over through promises of good quality, fair prices, accessibility, great client service, etc. The driving engines of every market are the concepts of supply and demand.
An industry is an economic concept used to regulate the general production and sale of a category of goods. There is the dairy product industry, the meat industry, the sweets industry, the film industry, the music industry, etc. The system is regulated by sets of rules that are constantly being modified to fit the realities of the market. In theory, the needs of the consumers and the rules of supply and demand are taken into account in matters of industry regulation. Issues regarding production, protecting the environment while producing the goods and innovative technology are also taken into account.
Market vs Industry
Both market and industry are economic concepts influenced by supply and demand. Once demand stops for a specific product, its market disappears. Without a market for a product, there is no industry regulating production.
The main difference between a market and an industry lies in the very nature of their development. A market is created by demand. The very existence of demand automatically creates a market. This is like the first unit of economic relations between a product and consumers. The next logical step is the creation of an industry. It is a way for producers to come together and make sure that they have a form of control over demand: for example, the environmental regulations meant to assure consumers that what they purchase does not ruin the world they live in, the use of technological innovations to make sure that the product remains in demand, and the production regulations intended to reassure consumers of the way the products are made.
While a market is created by any product in demand, an industry is created by producers. A market is a place where buyers and sellers connect, whereas an industry is created to help producers connect and set some rules. Drastic changes and technological advances in production can revolutionize the industry. The market only reacts to these changes.