Introduction

The market conduct is the pattern of commercial behavior that firms follow in adjusting to the markets in which they sell or buy. These commercial behaviors arise from the existing market structure and include price determination behavior, product behavior, research and development, innovation, advertising, sales promotion policies, financial policy and collusion and

Conduct Elements

The market structure determines the kinds of price determination strategies, advertising, product and price displays, sales promotion strategies, mode of payment/ terms of sales (deposit before delivery, cash terms and credit terms)

Performance Parameters

This is the end result of which is essentially brought about the nature of market structure and how firms conduct themselves. It includes:

• The price relative to the average cost of production. A price that just covers the cost is ideal. This price assumes fair returns to the inputs used in production but allow no excess profits. This ideal would be reached under conditions of pure competition.
• The relative efficiency this far is influenced by the scale or size of the plant and firm relative to the most efficient and by extent, if any excess capacity. Efficiency can be viewed as operational efficiency, pricing efficiency and technical efficiency. Operational efficiency aims at cutting costs, pricing efficiency helps in the allocation of marketing resources and marketing efficiency is based on the input output ratio.
• The size of sales promotion costs relative to the costs of production. Are promotion costs excessively high? What percent are advertising costs of the total production?
• The character of the product, including the choice of design, level of quality and variety of product within any market. Is the quality of the product within the industry high? Is there any variety available to the consumer? Are products excessively improved to the extent buyers would prefer a lower quality at a lower cost?
• The growth rate of the firm and the industry in developing both products and techniques of production. Are firms attempting to find cost reducing techniques? One scope might be the scope of their research activity. Do firms try to discover what the consumer wants? Does the firm have a good public image?