Domestic Market

Published by MBA Skool Team, Last Updated: January 22, 2018

What is Domestic Market?

Domestic Market is a market within a country’s own borders and trading is aimed at single market. In such markets, firms face similar set of competitive, political, economic, social, market and technological issues. Domestic Market encompasses only one set of customers and firms deal with the same.

Companies in Domestic Markets are generally provided with tax credits for employment generation and government of the country tries its level best to let domestic companies make trade agreements with foreign companies by removing barriers (regulations).

Domestic marketing is affected by both controllable and uncontrollable factors

Trading in domestic market is done in two ways:

  • Wholesale Trade - Purchasing goods from manufacturers in bulk and selling them to intermediaries or end customers.
  • Retail Trade-Purchasing goods from wholesalers and selling them to consumers in small quantities.

Advantages of Domestic Market

  • Firm can easily predict consumer preferences and can understand its own market niche
  • Can be cautious by predicting economic downturns of the domestic economy
  • Easy communication between workers due to same culture and language
  • Low taxes to be paid compared to foreign investing companies

Disadvantages of Domestic Market

  • Limited target market size
  • Limited availability of resources


Priya pickles which is famous for its various tasty pickles maybe successful in India as it is domestic market and pickle is very close with the culture and tradition of Indian people(importantly South Indians). But in case of international market, it would be difficult for Priyabrand to withstand and have more profits because culture of foreign people is quite different.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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