In every business, when a new company or individual tries to enter an existent market, it may face some difficulties. Those difficulties, also known as barriers, are caused mainly by the market structure, which can present itself in four different ways: pure competition, oligopoly, monopoly and monopolistic competition. In this article, you will learn the definition on those four different structures and how it affects Internet marketers.

The pure competition structure is experimented in almost every commodity market. Products have low or no differentiation at all, any company can leave or enter the market anytime (no relevant barriers) and the price and production volume of the products are defined by the market itself, individual companies can’t affect substantially the price or the volume of goods available in the market. In pure competition markets, producers try to brand products at all costs. Although a potato produced on a farm in California and on a farm in Texas are virtually the same, the producers try to brand their products, giving then some kind of extra value.

In oligopoly markets, we can find a lower number of companies sharing the market income. In this situation, new companies usually face large barriers to enter the market, which may involve economies of scale, privileged technology or knowledge and so on. Generally, companies experience a high profit in oligopoly marketers and each of the few companies can effectively affect the whole market price or product volume.

Monopolistic competition based markets are the most common ones out there. Those markets usually have many competitions, with higher barriers to enter when compared to pure competition markets and lower ones when compared to oligopoly markets. The different companies sells products that are differenced through minor characteristics, such as brand, formula, packaging, appearance, services includes and so on. In this market, prices are normally regulated by competition itself, the product price is the one consumers are willing to pay and sellers have relatively high profit. Some companies may offer more expensive products, based on unique characteristics it may deliver.

Monopoly markets are ruled by a single company or a single conglomerate of companies. They have complete control over price and products volume. Consumers don’t have a choice and must pay the price the company imposes so companies experience the highest profit in this market. In this case, entry barriers are tremendous.

The Internet Marketing market, on the advertiser side, is basically a pure competition market, with some monopolist competition characteristics. Even though entry barriers are very low or nonexistent (people can use free advertising techniques), the promoting ideas are unique for each individual. Those individuals (marketers) must do their very best to reach the highest number of consumers before the competition does.