4.1

• The marketing department of an organisation tends to have four main or generic objectives

  • Ensure that the right products are supplied to fulfil the needs and want of the customer
  • Set the correct price so that customers can afford to 
  • Distribute (or place) the products conveniently for customers to buy the product

  Ensure that there is adequate and effective promotion to convince customers to buy the firm's products.
• Market Orientation:

  • is a marketing approach used by businesses that are outward looking.  
• what are the advantages of market orientation

  1. great flexibility
  2. lower risk
• Advantage of market orientation - great flexiblity

  • Businesses can respond quickly to changes in the market as they have access to relevant data and information about customers.
  • Market oriented businesses are also more able to anticipate changing market trends and hence prepare for such changes.
• Advantages of market orientation - Lower risk

  • market-oriented businesses can be more confident that their products will sell and be more successful.
  • Decisions based on scientific methods, logic, and reasoning tend to be of lower risk.
  • Without proper market research and data analysis, the cost of marketing a product is far more likely to be a gamble. 
• Main disadvantages of market orientation

  1. That market research (needed to find out what customers actually want) can be very expensive
  2. Given the dynamic nature of the business environment and the uncertainty of the future, there is no guarantee that this approach will work.
• Product Orientation

  • is a marketing approach adopted by businesses that are inward-looking.
• what's the difference between market orientation and product orientation ?

  market orientation is outward looking whereas product orientation is inward looking.
• product orientation focuses on

  selling products that they make, rather than making products that they can sell.
• The main advantages of product orientation are:

  • That quality can be assured 
  • Business has more control over its operations
  • By being innovative, product orientation can give organisations a competitive advantage or a unique selling point
• The disadvantages of product orientation are:

  • However, as the needs of the market are ignored (because product-orientated organizations assume they know what the market wants), there is a high failure rate of businesses that use this marketing approach. 
  • Hence, this strategy tends to be a high risk, especially due to frequent and continual changes in fashion and tastes.
  • The money spent on research and development of products without considering the customer are often proves costly 
• Whether a business adopts a product orientated or market oriented approach depends on several factors including:

  1. the market
  2. organizational culture
  3. barrier to entry
• Market Share

  refers to an organisation's portion of the total value of sale revenue in a specific industry. 
• market share formula

  what is on the top

  A) firms sales revenue

  
• a common objective of established businesses is to increase their market share through growth. This is done in a number of ways:

  • The promotion of their products to develop brand value and brand loyalty 
  • Product development, product improvements and innovations
  • Motivation and training of the workforce in order to deliver better customer service. 
  • Establishing intellectual property rights, such as the use of trademarks, copyrights and patents 
  • Use of more efficient channels of distribution
• Market growth

   refers to the rate at which the size of a market is increasing.
• Market growth rate

  complete the formula

  A) current market size

  B) original market size

  C) original market size

  
• Market growth is often used as a measure of success of a business in relation to its

  market share
• Market leadership

  refers to the position of a business having the largest market share in a given market for a particular good or service. 
• A market leader

   can refer to a product, brand, or organisation so long as it holds the highest percentage of sales in a particular market. They dominate the market by being able to have influence with regards to all aspects of marketing, such as pricing, promotion, brand value, quality standards and distribution.
• Market leaders enjoy numerous interrelated advantages, which include:

  • Premium prices can be changed due to the firm's market leadership status, which increases profit margins. 
  • Lower production costs exist due to economies of scales the market leader operates at a larger scale than its rivals in the industry. This means the business has the market power to lower prices, whilst maintaining profit margins, in order to attract even more customers.
  • The market leader enjoys longer product life cycles due to the high degree of customer loyalty that exists for the brand or product.
• Market leaders enjoy numerous interrelated advantages, which include:

  • The market leader benefits from favorable distribution terms as more retailers and intermediaries choose to sell or redistribute the products of well-known and trusted brands 
  • more publicity and brand exposure due to having market leadership status.
  • It can also be easier to attract and recruit highly qualified employees, as they feel proud to be associated with the status held by market leaders. employees.
• What is the market growth rate?

  An important factor in product development and launch decisions
• Why do businesses often enter markets with growth?

  To capitalize on potential sales and profits
• How is market growth used to gauge a firm's success?

  By comparing its market share growth to the industry average
• What does it indicate if a firm's market share grows faster than the industry?

  It is outperforming its competitors
• What is a primary objective for businesses regarding growth?

  To capitalize on strengths and competencies for higher profits
• Why is customer loyalty important for businesses?

  It supports improved market share and profits
• What does market leadership refer to?

  The position of a business having the largest market share
• What can a market leader refer to?

  A product, brand, or organization with the highest sales percentage
• How do market leaders influence marketing aspects?

  By dominating pricing, promotion, brand value, quality standards, and distribution
• What is market share?

  A key metric for measuring business success against competitors
• What does a high concentration ratio indicate?

  Low competitiveness in the market
• What are some advantages of being a market leader?

  Charge premium prices and benefit from economies of scale
• How do market leaders secure favorable distribution terms?

  Through their leadership status and market dominance
• What is one challenge of market leadership?


  Pressure to maintain high standards and fend off challengers
• What complexity arises in calculating market share?

  Defining industries and collecting up-to-date sales data can be difficult
• What can outdated or incomplete market share estimates lead to?

  Misleading conclusions about a firm's market position