Product vs Market orientation
==Product orientation==
- product driven firms who focus on their product alone
advantages:
- can focus on the singular product.
- if the product is inelastic there will always be sales
disadvantages:
- no room for innovation
- if the product is elastic (luxury) the firm will most likely die - people will not buy (or flock to competitors at a cheaper price) because the product is a necessity
==Market orientation==
- market driven firms know their market and base decisions on the consumer’s wants and needs
| market | product |
|---|---|
| lots of research and focus groups | lots of R&D |
| lots of ideas then check them out via surveys etc with customer | sell the same products year after year (stick to what you know and makes you money) |
| lots of regular online feedback | either small vision driven entrepreneur or large, well-established company |
- ==benefits of being market orientated:==
- better understanding of market
- won’t produce as many wasted products (don’t waste R&D costs on products no-one wants
- catered to the customer’s needs and wants → ==customer satisfaction== → ==loyalty==, customers that return and are loyal allow for increased prices as they trust your brand → less advertisement needed
- always room for innovation
- ability to adapt faster to market change
influences of market orientation:
- nature of product
- policy decisions
- views of those in control
- nature and size of market (market share +how to boost)
- degree of competition (what are the competitors doing)