MARKET DYNAMICS The pricing signals that are created as a result of changing supply and demand levels in a given

market. Market dynamics describes the dynamic, or changing, price signals that result from the continual changes in both supply and demand of any particular product or group of products. Market dynamics is a fundamental concept in supply, demand and pricing economic models. Any change in either the supply or demand for a specific product or group of products forces a corresponding change in the other; these variances cause pricing signals. In a free (open) market where no entity has the ability to influence or set price, the price of a good is determined by the market; that is, buyers and sellers, collectively. A single entity or group, therefore, is unable to have a significant effect on market dynamics. Interaction between forces of demand and supply and the pricing signals they generate. In most free (open) markets any significant part of market dynamics is beyond the control of any firm or group. MARKET A market is one of the many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services (including labor) in exchange for money from buyers. It can be said that a market is the process by which the prices of goods and services are established. For a market to be competitive, there must be more than a single buyer or seller. It has been suggested that two people may trade, but it takes at least three persons to have a market, so that there is competition in at least one of its two sides. However, competitive markets, as understood in formal economic theory, rely on much larger numbers of both buyers and sellers. A market with single seller and multiple buyers is a monopoly. A market with a single buyer and multiple sellers is a monopsony. These are the extremes of imperfect competition. Markets vary in form, scale (volume and geographic reach), location, and types of participants, as well as the types of goods and services traded. Examples include: Physical retail markets, such as local farmers' markets (which are usually held in town squares or parking lots on an ongoing or occasional basis), shopping centers and shopping malls. (Non-physical) internet markets (see electronic commerce). Ad hoc auction markets. Markets for intermediate goods used in production of other goods and services. Labor markets. International currency and commodity markets. Stock markets, for the exchange of shares in corporations. Artificial markets created by regulation to exchange rights for derivatives that have been designed to ameliorate externalities, such as pollution permits (see carbon trading). Illegal markets such as the market for illicit drugs, arms or pirated products.

In mainstream economics, the concept of a market is any structure that allows buyers and sellers to exchange any type of goods, services and information. The exchange of goods or services for money is a transaction. Market participants consist of all the buyers and sellers of a good who influence its price. This influence is a major study of economics and has given rise to several theories and models concerning the basic market forces of supply and demand. There are two roles in markets, buyers and sellers. The market facilitates trade and enables the distribution and allocation of resources in a society. Markets allow any tradable item to be evaluated and priced. A market emerges more or less spontaneously or may be constructed deliberately by human interaction in order to enable the exchange of rights (cf. ownership) of services and goods. Types Of Markets Although many markets exist in the traditional sense such as a marketplace there are various other types of markets and various organizational structures to assist their functions. The nature of business transactions could define markets. Financial Markets Financial markets facilitate the exchange of liquid assets. Most investors prefer investing in two markets, the stock markets and the bond markets. NYSE, AMEX, and the NASDAQ are the most common stock markets in the US. Futures markets, where contracts are exchanged regarding the future delivery of goods are often an outgrowth of general commodity markets. Currency markets are used to trade one currency for another, and are often used for speculation on currency exchange rates. The money market is the name for the global market for lending and borrowing.

Prediction Markets Prediction markets are a type of speculative market in which the goods exchanged are futures on the occurrence of certain events. They apply the market dynamics to facilitate information aggregation. COMPETITIVE ANALYSIS OF MARKET The competitive analysis is a statement of the business strategy and how it relates to the competition. The purpose of the competitive analysis is to determine the strengths and weaknesses of the competitors within your market, strategies that will provide you with a distinct advantage, the barriers that can be developed in order to prevent competition from entering your market, and any weaknesses that can be exploited within the product development cycle. The first step in a competitor analysis is to identify the current and potential competition. As mentioned in the "Market Strategies" chapter, there are essentially two ways you can identify competitors. The first is to look at the market from the customer's viewpoint and group all your competitors by the degree to which they contend for the buyer's dollar. The second method is to group competitors according to their various competitive strategies so you understand what motivates them. Once you have grouped your competitors, you can start to analyze their strategies and identify the areas where they are most vulnerable. This can be done through an examination of your competitors' weaknesses and strengths. A competitor's strengths and weaknesses are usually based on the presence and absence of key assets and skills needed to compete in the market. To determine just what constitutes a key asset or skill within an industry, David A. Aaker in his book, Developing Business Strategies suggests concentrating your efforts in four areas: 1) 2) 3) 4) The reasons behind successful as well as unsuccessful firms. Prime customer motivators. Major component costs. Industry mobility barriers.

According to theory, the performance of a company within a market is directly related to the possession of key assets and skills. Therefore, an analysis of strong performers should reveal the causes behind such a successful track record. This analysis, in conjunction with an examination of unsuccessful companies and the reasons behind their failure, should provide a good idea of just what key assets and skills are needed to be successful within a given industry and market segment. For instance, in the personal-computer operating-system software market, Microsoft reigns supreme with DOS and Windows. It has been able to establish its dominance in this industry because of superior marketing and research as well strategic partnerships with a large majority of the hardware vendors that produce personal computers. This has allowed DOS and Windows to become the operating environment, maybe not of choice, but of necessity for the majority of personal computers on the market. Microsoft's primary competitors, Apple and IBM, both have competing operating systems with a great deal of marketing to accompany them; however, both suffer from weaknesses that Microsoft has been able to exploit. Apple's operating system for its Macintosh line of computers, while superior in many ways to DOS and Windows, is limited to the Macintosh personal computers; therefore, it doesn't run many of the popular business applications that are readily available to DOS and Windows. To an extent, IBM's OS/2 operating system suffers from the same problem. While it will run on all of the personal computers DOS and Windows can run on and even handle Windows applications, the number of programs produced for OS/2 in its native environment is very small. This is the type of detailed analysis you need in analyzing an industry. Through your competitor analysis you will also have to create a marketing strategy that will generate an asset or skill competitors do not have, which will provide you with a distinct and enduring competitive advantage. Since competitive advantages are developed from key assets and skills, you should sit down and put together a competitive strength grid. This is a scale that lists all your major competitors or strategic groups based upon their applicable assets and skills and how your own company fits on this scale. To put together a competitive strength grid, list all the key assets and skills down the left margin of a piece of paper. Along the top, write down two column headers: "weakness" and "strength." In each asset or skill category, place all the competitors that have weaknesses in that particular category under the weakness column, and all those that have strengths in that specific category in the strength column. After you've finished, you'll be able to determine just where you stand in relation to the other firms competing in your industry. Once you've established the key assets and skills necessary to succeed in this business and have defined your distinct competitive advantage, you need to communicate them in a strategic form that will attract market share as well as defend it. Competitive strategies usually fall into these five areas:

Product Distribution Pricing

Promotion Advertising

Many of the factors leading to the formation of a strategy should already have been highlighted in previous sections, specifically in marketing strategies. Strategies primarily revolve around establishing the point of entry in the product life cycle and an endurable competitive advantage. As we've already discussed, this involves defining the elements that will set your product or service apart from your competitors or strategic groups. You need to establish this competitive advantage clearly so the reader understands not only how you will accomplish your goals, but why your strategy will work. PATENTS, TRADEMARKS & COPYRIGHT Patents A patent (/ptnt/ or /petnt/) is a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time, in exchange for the public disclosure of the invention. An invention is a solution to a specific technological problem, and may be a product or a process. Patents are a form of intellectual property. The procedure for granting patents, requirements placed on the patentee, and the extent of the exclusive rights vary widely between countries according to national laws and international agreements. Typically, however, a patent application must include one or more claims that define the invention. These claims must meet relevant patentability requirements, such as novelty and non-obviousness. The exclusive right granted to a patentee in most countries is the right to prevent others from making, using, selling, or distributing the patented invention without permission. Under the World Trade Organization's (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights, patents should be available in WTO member states for any invention, in all fields of technology, and the term of protection available should be a minimum of twenty years. Nevertheless, there are variations on what is patentable subject matter from country to country. The word Patent originates from the Latin Patere, which means "To Lay Open" (i.e., to make available for public inspection). More directly, it is a shortened version of the term letters patent, which was a royal decree granting exclusive rights to a person, predating the modern patent system. Similar grants included land patents, which were land grants by early state governments in the USA, and printing patents, a precursor of modern copyright. In modern usage, the term patent usually refers to the right granted to anyone who invents any new, useful, and non-obvious process, machine, article of manufacture, or composition of matter. Some other types of intellectual property rights are also called patents in some jurisdictions: industrial design rights are called design patents in the US, plant breeders' rights are sometimes called plant patents, and utility models and Gebrauchsmuster are sometimes called petty patents or innovation patents. The additional qualification utility patent is sometimes used (primarily in the US) to distinguish the primary meaning from these other types of patents. Particular species of patents for inventions include biological patents, business method patents, chemical patents and software patents. Trademark A trademark, trade mark, or trade-mark is a recognizable sign, design or expression which identifies products or services of a particular source from those of others. The trademark owner can be an individual, business organization, or any legal entity. A trademark may be located on a package, a label, a voucher or on the product itself. Trademarks are used to claim exclusive properties of products or services. The usage of trademarks by its owner can cause legal issues if this usage makes him guilty of false advertising or if the trademark is offensive. Trademarks can be owned, but also licensed. Many toy suppliers are licensees. For example: Bullyland obtained a license to produce Smurf figurines. The Lego Group purchased a license from Lucasfilm in order to be allowed to launch Lego Star Wars. TT Toys Toys is a manufacturer of licensed ride-on replica cars for children.

The unauthorized usage of trademarks by producing and trading counterfeit consumer goods is known as brand piracy. The owner of a trademark may pursue legal action against trademark infringement. Most countries require formal registration of a trademark as a precondition for pursuing this type of action. The United States, Canada and other countries also recognize common law trademark rights, which means action can be taken to protect an unregistered trademark if it is in use. Still common law trademarks offer the holder in general less legal protection than registered trademarks. A trademark may be designated by the following symbols:

(the "Trademark Symbol", which is the letters "TM", for an unregistered trademark, a mark used to promote or brand goods). (which is the letters "SM" in superscript, for an unregistered service mark, a mark used to promote or brand services). (the letter "R" surrounded by a circle, for a registered trademark).

A trademark is typically a name, word, phrase, logo, symbol, design, image, or a combination of these elements. There is also a range of non-conventional trademarks comprising marks which do not fall into these standard categories, such as those based on color, smell, or sound (like jingles). The term trademark is also used informally to refer to any distinguishing attribute by which an individual is readily identified, such as the well-known characteristics of celebrities. When a trademark is used in relation to services rather than products, it may sometimes be called a service mark, particularly in the United States. The essential function of a trademark is to exclusively identify the commercial source or origin of products or services, so a trademark, properly called, indicates source or serves as a badge of origin. In other words, trademarks serve to identify a particular business as the source of goods or services. The use of a trademark in this way is known as trademark use. Certain exclusive rights attach to a registered mark, which can be enforced by way of an action for trademark infringement, while unregistered trademark rights may be enforced pursuant to the common law tort of passing off. It should be noted that trademark rights generally arise out of the use of, or to maintain exclusive rights over, that sign in relation to certain products or services, assuming there are no other trademark objections. Different goods and services have been classified by the International (Nice) Classification of Goods and Services into 45 Trademark Classes (1 to 34 cover goods, and 35 to 45 services). The idea behind this system is to specify and limit the extension of the intellectual property right by determining which goods or services are covered by the mark, and to unify classification systems around the world. Copyright Copyright is a legal concept, enacted by most governments, giving the creator of an original work exclusive rights to it, usually for a limited time. Generally, it is "the right to copy", but also gives the copyright holder the right to be credited for the work, to determine who may adapt the work to other forms, who may perform the work, who may financially benefit from it, and other related rights. It is a form of intellectual property (like the patent, the trademark, and the trade secret) applicable to any expressible form of an idea or information that is substantive and discrete. Copyright initially was conceived as a way for government to restrict printing; the contemporary intent of copyright is to promote the creation of new works by giving authors control of and profit from them. Copyrights are said to be territorial, which means that they do not extend beyond the territory of a specific state unless that state is a party to an international agreement. Today, however, this is less relevant since most countries are parties to at least one such agreement. While many aspects of national copyright laws have been standardized through international copyright agreements, copyright laws of most countries have some unique features. Typically, the duration of copyright is the whole life of the creator plus fifty to a hundred years from the creator's death, or a finite period for anonymous or corporate creations. Some jurisdictions have required formalities to establishing copyright, but most recognize copyright in any completed work, without formal registration. Generally, copyright is enforced as a civil matter, though some jurisdictions do apply criminal sanctions. Most jurisdictions recognize copyright limitations, allowing "fair" exceptions to the creator's exclusivity of copyright, and giving users certain rights. The development of digital media and computer network technologies have prompted reinterpretation of these exceptions, introduced new difficulties in enforcing copyright, and inspired additional challenges to copyright law's philosophic basis. Simultaneously, businesses with great economic dependence upon copyright have advocated the extension and expansion of their intellectual property rights, and sought additional legal and technological enforcement. Anti-copyright critics claim copyright law protects corporate interests while criminalizing legitimate use, while proponents argue the law is fair and just, protecting the interest of the creator.

A COMPARISON OF VARIOUS TYPES OF INTELLECTUAL PROPERTY

TRADE SECRET COPYRIGHT TRADEMARK DESIGN PATENT UTILITY PATENT

What is protected?

Know-How.

Original Expression Of An Idea. Written Material: Computer Programs, Books, Plays, Poems; Art: Sculptures, Paintings, Photographs, Etc.

Customer's Notion Of Your Good Or Service's Source.

Visible Appearance.

Products, Processes, Compositions, Functions.

Typical things protected

How To Make Coca-Cola, Hidden HighTech Methods, & Etc. Unauthorized Use Or Dissemination By Someone Who Has Been Let In On The Secret.

Names, Logos, Internet Domain Names, Designs, & Etc.

Unique Shape/Styling Of Articles Like Product Packaging, Figurines, Etc. Making Something Looking The Same Or Similar.

Tools, Devices, Machines, Computer Programs, Games, Processes, Formulas, Internet, Electronic, Chemical And Business Methods Etc.

What are others prohibited from doing?

Copying Expression.

The

Confusing Consumer.

The

Using The Claimed Invention.

How is the right established?

Use In Trade.

Authorship.

Use In Trade.

Examination.

Examination.

What is needed to get protection?

Know-How Must Be Well Defined, Not Publicly Known, And Protected. Country Of Origin Or By Other Countries By Treaty.

Tangible Use Of The Expression.

Mark Must Distinctive, And Not Confusingly Similar To Another.

Visible Appearance Must Be New And Not Obvious.

Invention Must Be New, Useful And Not Obvious, And You Must Teach How To Make And Use It.

Geographic coverage

Worldwide.

Country Filed In.

Country Filed In.

Country Filed In, Or Worldwide If PCT Filing.

What is the duration of protection?

Until Disclosed To The Public.

Life Of Author Plus 50 Years.

10 Years, Or As Long As It Is In Use.

14 Years (US) From Grant.

At Most 20 Years From Filing.

What Are Patents, Trademarks, Service-marks, and Copyrights? The difference between patents, copyrights, and trademarks can be confusing sometimes. Although there may be some similarities among these kinds of intellectual property (IP) protection, they are different and serve very different purposes. What Is a Patent? A patent for an invention is the grant of a property right to the inventor, issued by the Patent and Trademark Office. The term of a new patent is 20 years from the date on which the application for the patent was filed in the United States or, in special cases, from the date an earlier related application was filed, subject to the payment of maintenance fees. US patent grants are effective only within the US, US territories, and US possessions. The right conferred by the patent grant is, in the language of the statute and of the grant itself, "the right to exclude others from making, using, offering for sale, or selling" the invention in the United States or "importing" the invention into the United States. What is granted is not the right to make, use, offer for sale, sell or import, but the right to exclude others from making, using, offering for sale, selling or importing the invention. What Is a Trademark or Service-mark? A trademark is a word, name, symbol or device which is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others. A service-mark is the same as a trademark except that it identifies and distinguishes the source of a service rather than a product. The terms "trademark" and "mark" are commonly used to refer to both trademarks and service-marks. Trademark rights may be used to prevent others from using a confusingly similar mark, but not to prevent others from making the same goods or from selling the same goods or services under a clearly different mark. Trademarks which are used in interstate or foreign commerce may be registered with the Patent and Trademark Office. The registration procedure for trademarks and general information concerning trademarks is described in a separate pamphlet entitled "Basic Facts about Trademarks". What Is a Copyright? Copyright is a form of protection provided to the authors of "original works of authorship" including literary, dramatic, musical, artistic, and certain other intellectual works, both published and unpublished. The 1976 Copyright Act generally gives the owner of copyright the exclusive right to reproduce the copyrighted work, to prepare derivative works, to distribute copies or phono records of the copyrighted work, to perform the copyrighted work publicly, or to display the copyrighted work publicly. The copyright protects the form of expression rather than the subject matter of the writing. For example, a description of a machine could be copyrighted, but this would only prevent others from copying the description; it would not prevent others from writing a description of their own or from making and using the machine. Copyrights are registered by the Copyright Office of the Library of Congress.