Posted in Marketing and Strategy Terms, Total Reads: 2162
Definition: Market Signal
Unintentional or passive passage of information or indication between participants of a market. For example If a firm issues bonds it indirectly shows that it needs capital and also desires to retain control thus instead of equity capital it prefers loan capital. It is based on the technical indicators and usually are the sign for when to sell or buy a particular product. It also brings attention of users to the other options available, abnormal growth and short term interests. Using signals in volatile markets can help to point out opportunities to the investors and also will signal them if they disappear.
Enterprises usually renounce his action in this dynamic world by doing various medium or other outlets. There are usually two method to deliver market signal: send news and activity. The market signal expects to deliver consumer, rivals and outlet member , and the earlier studying of market signal which mainly concentration on signal's influence, such as price signal where costly products make customer think it is made of high quality raw material and even more advertisement means customer will think that the enterprise has more strength. Every company doesn’t market in a static environment, the competitor and member of outlet will make prediction and reaction to enterprises, their decisions process is a dynamic market mechanism.
According to Porter market signal is any activity of rival. In order to understand rivals motive, intention and direct and indirect target news and competitive signals such as reduced price, new product introduction and adopting new engineering technology needs to be understood. The information delivers to the market mainly through the market signal. If we identify, search, study and analyse the market signal, then it not only take strategic decision and contribute to analytical behaviour trend, but also to improve enterprise results. For example a good reputed company can be judged by its income i.e. if its sales increases then its reputation in the market also increases.