The Trading Market

The trading market is the universe in which your model business exists and operates. It is made up of all other businesses and consumers. It is the centre of the business process. It is the collective focus of all sub-processes which take place within your business.

From the point of view of a business, the function or purpose of the trading market is to convert goods into money and money into goods. [For goods you can equally read services.] This is why it is placed in the middle of the diagram linking the physical processes and resources of the business (on the right) to the less tangible financial ones (on the left).

Looking outwards from your business, the trading market may be conceptualised as a sequence of 'concentric' domains, each spatially contained within the one beyond it. These share a symmetry with the logical domains of the generic business's economic resources. Starting with the outermost, these domains may be classified as follows.

The Global Market: This is, in effect, the whole of humanity. Theoretically it is your potential market. However, it is generally far too big for any single person or company to know about fully.
The Researchable Market: This includes all the people and companies you actually know exist, and can get information about. They are those businesses or consumers listed on a bought-in database or whose details you have otherwise obtained. This is the domain in which you conduct your market research, analyse who is there, what kind of people they are and what they are likely to buy or accept. This is your known market.
The Reachable Market: You do not necessarily have the practical means to reach all the people you know about. You can therefore only actually make yourself known to a fraction of your known market. These are the people who are theoretically able to see your advertising, read editorial about you and receive your unsolicited communications. This is the domain for which you build your proactive marketing database.
The Responding Market: Of those who are aware of you, only a small fraction will actually reciprocate by contacting you. They are - or at least profess to be - interested in what you have to sell. These are the people with whom you will communicate regularly and - over time - hopefully develop quite a rapport.
The Captured Market: Of those who respond, a small fraction will actually do business with you. These form your captured market. They are the people for whom you hold customer accounts, from which trails of transaction records emerge.

Market Data

In order to trade, you need to build and maintain a base of information about your market. The first and largest domain of the market on which you can practically acquire data is the researchable market. You buy in this data from a market list vendor who will supply it as a file which can be imported into a conventional database such as an SQL server. This will contain minimal data on a large number of people and companies who could potentially become your customers.

You then work out the geographic and business constraints which define your reachable market. You then formulate these constraints into a 'structured query' and submit it as an SQL query to your researchable market database. This will cause it to extract a sub-set of your researchable market, which will be your reachable market. In other words, it furnishes you with a sub-database comprising your reachable potential customers. You then use this sub-database to contact these potential customers to see if they want to do business with you. It is an on-going process. You also advertise through passive media which are likely to reach these people.

As a result, some of these people should start to respond to you. Those that do, form your responding market. To become effective at this point, you need to start collecting additional information on these people. This information is of a kind which does not lend itself to being stored and manipulated by conventional database technology. You need to be able to build information not just on the people who make up your marketplace, but also on their relationships with you and with each other.

What you now need is a hybrid database comprising a conventional SQL server linked to two separate small-world networks each comprising a set of interlinked HTML files, which employ some additional special tags. The two kinds of HTML files in this system are:

Those which contain dossiers about people
Those which contain subjects and issues

These two classes of HTML file are related through a relational table which relates people in terms of the subjects and issues upon which their relationships are based. This arrangement helps you to build a sustainable relationship and a good working rapport with each member of your responding market.As a result, many of these people should start to trade with you. Those who do, then form your captured market.

To the dossier file of each member of your captured market is then attached a trading account. This comprises a trail of finite state transaction records for trade which has taken place between you and each person or company.

All this is the essence of my personal link package.