IBDP Business 4.1

Market Orientation

approach that heavily relies on market research

Focus of Market orientation

outside of the organisation, the market

Advantage of market orientation

can respond quickly to needs and wants

Disadvantage of market research

can be expensive and time consuming because research isn’t free

Product orientation

approach that relies heavily on innovation and impressing customers

Focus of product orientation

on the organisation and its products

Advantages of product orientation

if successful, you have almost no competition

Disadvantages of product orientation

High risk, time consuming and expensive because of innovation and R&D

Market size

total sales in the entire industry by value or volume

Market share

A firm’s percentage share of total sales in the industry by value or volume

Market power

the amount of market share a firm has

Market growth

percentage of the customer number increase of the entire industry relative to market size by volume or value

Market leader

the firm with the highest market share in the industry

Advantages of having more market share

economies of scale can occur, and increase brand image

Disadvantages of having more market share

doesn’t equal profitability, because balancing customer satisfaction and profit is difficult

Market leader needs

High input in promotion or innovation