Questions and Answers
What is marketing?
Refers to making sure the right goods and services are provided to the right customers in the right place and the right time.
What is market orientation?
An approach focused on market research to understand customers' needs and wants.
Market-oriented businesses primarily focus on what to produce.
False
What is the main advantage of a market-oriented approach?
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What is product orientation?
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Product-oriented businesses always provide unique products that have no alternatives.
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Market size = _____ sales of all organizations in the industry.
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How is market share calculated?
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What does market growth represent?
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What are some advantages of market leadership? (Select all that apply)
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What are some challenges in maintaining market leadership?
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Study Notes
Marketing Overview
- Marketing ensures the right goods/services reach the right customers at the right time and place.
Market Orientation
- Focuses on market research to identify customer needs and wants.
- Businesses prioritize selling based on market demand rather than production capabilities.
- Market-oriented approach is outward-looking and responsive to changes in customer preferences.
- Emphasis on the question: "What to sell?"
- Advantages: Ability to quickly adapt to customer demands through ongoing research.
- Disadvantages: Market research can be time-consuming and costly.
Product Orientation
- Emphasizes innovation and unique product development with no alternatives.
- Businesses focus on internal capabilities and products rather than customer feedback.
- Predominantly asks: "What to produce?"
- Advantages: Establishes first-mover advantage by offering unique products and gaining market leadership.
- Disadvantages: High costs due to constant R&D and risk of unsuccessful product launches.
Market Definitions
- A market encompasses all potential buyers of a product, trade locations, or offered products.
- Market size measures total sales in an industry, which can be expressed in value or volume.
Market Size and Market Share
- Market size = cumulative sales of all organizations in the sector, measured in currency or item volume.
- Market share indicates a company's portion of total sales in a market, expressed as a percentage.
- Calculation: Market share (%) = (organisation's sales ÷ total sales in the industry) × 100.
- Higher market share typically equates to greater market power, influencing rules and pricing.
Market Growth
- Market growth reflects the percentage change in market size over time.
- Calculation: Market growth (%) = [(market size now - market size before) ÷ market size before] × 100.
Market Leadership
- Market leaders enjoy notable recognition and credibility as top brands.
- Access to broader distribution channels due to high status.
- Economies of scale are achieved through large-scale production, lowering costs.
- Market leaders possess significant market power to dictate prices and influence product innovation.
Challenges of Maintaining Market Leadership
- Continuous investment in market research is necessary to stay in tune with customer needs.
- Ongoing innovation is crucial to remain competitive.
- Profitability must be balanced with high market share; lower prices can reduce profits.
- Lack of competitive pressure may hinder innovation efforts, putting market leaders at risk.
- Potential for anti-competitive behavior due to market dominance.
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Description
This quiz explores essential concepts in marketing, specifically focusing on market orientation. Understand how businesses prioritize customer needs through market research and the implications of providing the right goods and services. Test your knowledge on marketing strategies and customer-centric approaches.
