24 Questions
What is the primary reason why companies like Kodak, Blockbuster, and Nokia struggled to survive?
Failure to monitor competitors and customer needs
Which of the following is a key factor in gaining a competitive advantage?
Continuously improving value offerings
What is a potential source of innovative marketing ideas within a company?
Employees with youthful or diverse perspectives
What is the percentage of sales generated by RB (formerly Reckitt Benckiser) from products under three years old?
35%
What is a key challenge facing companies that fail to innovate?
Survival in a rapidly changing market
What is essential for companies to stay ahead of competitors?
Constantly moving forward and innovating
What is a potential source of fresh ideas for marketing strategy?
Employees far removed from company headquarters
What is critical for companies to succeed in a competitive market?
Innovation in marketing strategies
Which of the following consumer preferences is a key consideration for managers of production-oriented businesses?
Widespread availability and low prices
What is the primary goal of managers who adopt the production concept?
To achieve high production efficiency and low costs
Which of the following companies is an example of a production-oriented business?
Haier
What is a potential pitfall of adopting the product concept?
Falling in love with the product and neglecting customer needs
What is the primary assumption of the product concept?
Consumers favor products offering the highest quality, the best performance, or innovative features
Which of the following is a key benefit of adopting the production concept?
Lower production costs and increased market share
What is the primary goal of managers who adopt the product concept?
To develop high-quality products with innovative features
Which of the following is an example of a market expansion strategy?
Using the production concept to expand the market
What is the primary assumption of the selling concept?
Consumers and businesses, if left alone, won't buy enough of the organization's products.
What type of goods are most likely to be sold using the selling concept?
Unsought goods, such as insurance and cemetery plots.
What is the main difference between a product-oriented definition and a market-value-oriented definition of a business?
The former focuses on the product's features, while the latter focuses on the customer's needs.
What is a common consequence of a company with overcapacity trying to sell what it makes rather than make what the market wants?
The company will have to adopt a selling concept to stimulate demand.
What is the primary goal of a company that adopts a market-value-oriented definition?
To make what the market wants and create value for customers.
What is a key factor in determining the success of a new or improved product?
The product's pricing, distribution, advertising, and sale.
What is the main difference between a company that adopts a selling concept and a company that adopts a market-value-oriented definition?
The former focuses on product features, while the latter focuses on customer needs.
What is a potential consequence of a company's failure to understand its target market?
The company's products may not be successful in the market.
Study Notes
Product-Oriented vs Market-Value-Oriented Businesses
- Consumers prefer products that are widely available and inexpensive, driving production-oriented businesses to focus on high production efficiency, low costs, and mass distribution.
- This approach has been successful in developing countries like China, where companies like Legend and Haier have leveraged the country's large and inexpensive labor pool to dominate the market.
The Production Concept
- Managers may use the production concept to expand the market, but this approach can lead to a "better-mousetrap" fallacy, where they believe a better product will automatically lead to customer demand.
- Examples of companies that have fallen victim to this fallacy include Kodak, Blockbuster, and Nokia, which were overtaken by competitors like Facebook, Google, Netflix, and Amazon.
The Product Concept
- The product concept proposes that consumers favor products offering the highest quality, best performance, or innovative features.
- However, companies must constantly innovate and improve their value offerings and marketing strategies to stay ahead of competitors.
Innovation in Marketing
- Innovation in marketing is critical, and companies can find fresh ideas by encouraging input from employees with diverse perspectives, those far removed from headquarters, and new industry entrants.
- Examples of innovative companies include British-based RB, which generates 35% of sales from products under three years old.
The Selling Concept
- The selling concept holds that consumers and businesses won't buy enough products unless they are actively persuaded, often through aggressive sales tactics.
- This approach is commonly used with unsought goods like insurance and cemetery plots, and when companies with overcapacity aim to sell what they make rather than make what the market wants.
This quiz covers the different orientations of businesses, particularly production-oriented businesses, and their focus on high production efficiency and low costs.
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