topic 4

• Market orientation


  A firm that is market oriented will look to the market to see what consumers need and want. They are outward looking.
• Product orientation


  A firm that is product oriented will look at what they can make instead of making products that they can sell. They are inward looking.
• Market oriented firm


  • McDonald's introducing the McPlant burger
• Product oriented firm


  • Bugatti Veyron, one of the fastest production cars in the world
• Advantages of market oriented firms

  • Greater flexibility, able to respond quickly to changes, lower risk
• Disadvantages of market oriented firms


  • Market research is needed, no guarantee this approach will work
• Advantages of product oriented firms

  • Quality can be assured, more control over operations
• Disadvantages of product oriented firms

  • Needs of the market are generally ignored, high risk strategy with high failure rate, high research and development costs
• Market share


  An organization's share of the total value of sales within a specific industry
• Calculating market share


  Market share = (Organization's sales / Total industry sales) x 100
• Importance of market share

  • Firms with high market share benefit from their status, price setting abilities and are less threatened by competition
• Ways to increase market share

  1. Brand promotion

  2. Product development

  3. Motivating and training the workforce

  4. Establishing intellectual property rights

  5. Using more efficient channels of distribution
• Market growth

  The rate at which the size of a market is increasing
• Calculating market growth


  Market growth rate = ((Current year value - Previous year value) / Previous year value) x 100
• Facebook, YouTube and WhatsApp are the market leaders for social networks worldwide (as of 2022)
• Benefits of being a market leader

  • Premium pricing
  • Economies of scale
  • Longer product life cycles
  • Favorable distribution terms
  • Greater publicity and brand exposure
  • Easier to attract and recruit highly qualified employees
• Given the diverse nature of international cultures and etiquette, can marketers ever know what is ethically right and what is ethically wrong?
• Niche market


  A specific and well-defined market segment
• Niche markets


  • Luxury yacht makers
  • Haute couture
  • Minority sports (e.g. disc golf)
• Advantages of niche marketing

  • Better marketing focus, able to charge higher prices due to less competition, highly specialized in meeting needs and wants
• Disadvantages of niche marketing

  • Limited customer base, few opportunities to exploit economies of scale, successful niche markets can attract new entrants into the industry, leading to more competition
• Mass market


  Multiple market segments targeted to maximize sales
• Mass marketers


  • Supermarkets, fast food chains, consumer electronics retailers
• Advantages of mass marketing

  • Economies of scale, able to use a single marketing campaign to address entire market, large customer base
• Disadvantages of mass marketing

  • High barriers to entry, heavy competition, lacks focus and may not satisfy individual needs and wants
• Unique selling point (USP)

  Any aspect of a business, product or brand that makes it stand out from competitors
• Examples of USPs


  • Being the only firm in an area to supply a certain product
  • First mover advantage
  • Reputation for high quality
  • Reputation for low cost
  • A highly popular slogan
• Differentiation

  The act of distinguishing a business or its products from rivals in the industry
• Advantages of differentiation


  • Price advantages, brand recognition and loyalty, distribution advantages
• Disadvantages of differentiation


  • Costly, economies of scale cannot be exploited, excessive differentiation can confuse customers
• Is it ethical to block online advertisements?
• Ethical marketing is a growing part of strategic marketing planning. Environmental sustainability is increasingly at the forefront of strategic marketing planning.
• Sales forecasting


  A quantitative management technique used to predict a firm's level of sales over a given time period
• Sales forecasting techniques


  1. Extrapolation

  2. Market research

  3. Time series analysis
• Extrapolation


  Forecasting technique that identifies the trend by using past data and extending this trend to predict future sales
• Market research


  Identifying and forecasting the buying habits of consumers
• Time series analysis


  Technique that attempts to predict sales levels by identifying the underlying trend from a sequence of actual sales figures
• Elements of time series analysis

  • Seasonal variations
  • Random variations
  • Cyclical variations from economic booms and slumps
• Product recalls of unsafe goods - Random variation
• Public relations disaster - Random variation