Market Orientation And Product Orientation ✅ A level Business and GCSE Business Revision

Summary

This video explains the concepts of market orientation and product orientation in business. Market orientation focuses on meeting customer needs through research, as demonstrated by companies like Amazon and Coca-Cola. In contrast, product orientation centers on the company's strengths and expertise, with Sony's Walkman as an example. The video highlights the benefits and drawbacks of each approach, emphasizing that many successful businesses, such as Apple, use both methods to create high-quality products that satisfy customer demands while maintaining competitive advantages.

Takeaways

• 📊 Market orientation focuses on designing products and services based on customer needs and wants.
• 📈 Most markets are moving toward a market-oriented approach as customers seek more variety and better quality.
• 🚚 Amazon exemplifies market orientation by introducing features like Amazon Prime, addressing customer desires for fast and free deliveries.
• 💡 A market-oriented approach is customer-driven, creating products based on thorough understanding of target market needs through research.
• 🛠 Market research plays a crucial role in market orientation, using primary research to inform product development.
• 🏷 Companies can charge premium prices for products that align well with customer needs, creating strong customer relationships.
• 🏋️‍♂️ Coca-Cola uses market orientation by adapting to trends such as health consciousness, demonstrated by acquiring brands like Smart Water.
• 💸 A drawback of market orientation is the high cost and time consumption involved in conducting market research.
• 🏭 Product orientation focuses on the business's core competencies, like a brick manufacturer producing high-quality bricks without much concern for market research.
• 📱 A product-oriented business may develop innovative products, such as Sony’s Walkman, based on its strengths rather than market demand.

Q & A

What is market orientation?

Market orientation is a business approach where companies focus on designing and developing products or services that meet customer needs and wants.

Why are businesses moving toward a market orientation approach?

Businesses are shifting toward a market orientation approach because customers have become more knowledgeable and demand more variety and higher quality products, making it essential for businesses to focus on customer satisfaction.

How does a market orientation approach help avoid wasted resources?

A market orientation approach helps avoid wasted resources by ensuring that businesses are already aware of their customers' needs and wants, thus creating products that are more likely to succeed in the market.

Can you give an example of a company that follows a market orientation approach?

Amazon is an example of a market-oriented company. Through research and customer feedback, Amazon introduced services like Amazon Prime, which offers next-day delivery, addressing customer desires for quick and cost-effective shipping.

What is a key disadvantage of market orientation?

A key disadvantage of market orientation is that conducting market research can be costly and time-consuming.

What is product orientation?

Product orientation is a business approach where companies focus on their own strengths and expertise in producing high-quality products, rather than focusing on customer needs and wants.

Can you provide an example of a business that follows a product orientation approach?

A business that manufactures bricks is an example of a product-oriented company. Instead of conducting market research, they rely on their expertise to produce good quality bricks, assuming their products will sell based on their quality.

What is a potential disadvantage of a product orientation approach?

A potential disadvantage of a product orientation approach is that customers may not be interested in the product, as the business does not focus on market research or customer preferences.

What is an example of a product developed under product orientation that consumers didn't know they wanted?

Sony's Walkman, a portable cassette player with headphones, is an example of a product developed under a product orientation approach. It allowed consumers to listen to music on the go, a need they were not previously aware of.

How can businesses benefit from using both market and product orientation approaches?

By using both market and product orientation approaches, businesses can combine product research with market research, which helps them develop high-quality products that also meet customer needs. This balance ensures that products are well-received in the market and fit customer preferences.