Page 6: Types of market
There are a number of different types of markets in which businesses operate:
- Commodity markets include those for raw materials such as cocoa used in the production of chocolate. A shipment of cocoa from Africa may be split between two buyers - the product is the same for both buyers. Insurance bought at Lloyd's is often bespoke - the product or policy is created specifically for the client, so the product might not be the same for each client.
- Consumer markets involve producing goods and services for the private individuals who consume them. Large companies that supply consumer markets, such as manufacturers and banks, insure at Lloyd's.
- Capital goods markets involve trade in valuable equipment that a manufacturer will use to produce end products for consumer or industrial markets. This equipment will have a long life span and will be listed as an asset of the company and because of its worth, such equipment will be insured so it can be replaced if stolen or repaired if damaged.
Services can be provided to consumers or businesses in the same way products are sold to consumers.
The Lloyd's syndicates operate primarily in the market for specialist insurance, providing insurance services to their clients.
Other specialist markets within commercial services include capital markets such as the Stock Exchange, where companies sell shares in their businesses. The Stock Exchange provides a structure and market place for the trade in shares and is similar to Lloyd's in that it facilitates buying and selling between others, but does not buy or sell itself.