Market-Oriented and Product-Oriented Approaches - Essay Example

Market-Oriented and Product-Oriented Approaches Market-Oriented and Product-Oriented Approaches Introduction CharteredInstitute of Marketing gives the definition of marketing as the action, set of institutions and the entire process of creation, communication, delivery and exchange of offerings that bear value for clients, society as a whole, partners and customers. Marketing is the process of management that is bestowed with the responsibility of the profitable identification, anticipation and satisfaction of customer requirements. The American Marketing Association attempts to give the definition of marketing and therefore asserts that marketing is the planning and execution process in pricing, conception, distribution and promotion of goods, ideas and services for the creation of exchanges that lead to satisfaction of organizational and individual goals. In business, there are two approaches to marketing, which are the product-oriented approach and marketing oriented approach. These two approaches determine development of products. In the market-oriented approach, the business acts upon the wants of the customers. The decisions that are undertaken are founded on the information regarding the wants and needs of the consumers, rather than depending on what the business assumes is good for the consumer. Many of the successful businesses use the market-oriented approach (Medeiros 2010). On the other end, a product-oriented approach implies that the development of the products depend on what the firm considers to be good in doing or making but not on what the customer wants. The criticism of this approach arises from the fact that in most cases leads to the production of products that are unsuccessful, specifically in the markets that are well established. A behavioral approach that attempts to explain the marketing orientation from a perspective that is different is adopted by Elliot. He gives the suggestion that the idea of marketing orientation, together with the philosophy of setting a priority in satisfaction of the needs of the customers, though necessary, is not sufficient and needs revisiting. He gives the opinion that making strategies that are aimed at attaining satisfaction of the customer requires to be perceived as a part of the idea of marketing orientation. The strategic-behavioral approach used in the explanation of the marketing orientation has been accepted ad supported as well by other authors. As a matter of fact, trials have been made in giving the explanation that marketing orientation needs developed marketing skills, emphasizing particularly in the formation and implementation of marketing strategies. It also needs changes in the structure of the organization and also the marketing systems used by the company. Within the behavioral-strategic approach framework to the marketing orientation, a suggestion from Piercy is that marketing orientation is constituted by three factors (Rosinski, Philippe 2010). First element is the strategies that are concerned with the important decisions of defining the market and also segmenting it as well as identifying the potential bases for differentiating the products of the company against those offered by the competitors. Second, it is the plans that regard developing policies that help in developing the market mix. Third factor is the information that concerns the whole market, which is useful for designing, controlling, and planning the strategies. With this description of marketing orientation, a clear establishment of the behavioral approach by Piercy is achieved in the definition the idea of marketing orientation. Product-oriented approach When the business lays the foundation of its marketing mix on what the firm perceives as its internal strengths, the marketing of the business is considered as ‘product-oriented’. If the business uses the basis of its marketing mix on the perception it has on what is wanted in the market, the marketing of the business is considered to be ‘market-oriented’ or ‘market led’. The marketing that is based on the assets utilizes the strengths of the products such as the brand image and the name for the purpose of marketing both existing and new products. In the asset led marketing, decisions regarding marketing are made on the basis of the consumer’s needs and the product’s asset. From the start point, all business firms must produce their products based on the internal strengths that they possess though they must be able to match the knowledge that they have regarding the market to these internal strengths. This implies meeting the market demand by adapting and making use of the assets of the business such as available capital, reputation, and labor skills. In the continuous growth of the firm, it might discover that it has the wish to move further from the internal strengths and in fact structure future utilization of all the factors in a way that the operations of the business and the products it produces fully meet the market demand patterns that are ever changing. When this is achieved, the business is actually market oriented. If a business firm is product oriented, the goods and services it produces will be based on the firm’s internal organizational strengths as it perceives. Firms that use product oriented approach in its marketing attempt selling all that they can produce without making efforts to discover whether it is what is wanted by the consumers. Example The huge successful growth of Sony relied on this policy and gained its fame for this approach. The vividly clear instance was the Walkman, which was launched in the period of late ‘70’s, whether the marketing professionals asserted that it would not record high sales since it lacked the recording facility but the generation of teenagers proved different (Hollensen 2010). An example that is more up-to-date is Apple, which was the first iPad to be product led launch unlike previous trials by several companies to discover the market for the tablet computers were not successful. If a business is product oriented, it enjoys several advantages for this strategy. Firms are enabled to focus on its internal quality while technological investment could be applicable to a broad range of products. The firm can enjoy economies of scale more easily. This strategy will enable the business to outsource production, and the firm remains to be crucially a design house. However, the product-oriented strategy has its demerits that challenge its use. The disadvantages comprise of the inability to respond to alterations in the market structure of the business. Secondly, the taste and fashion are not considered in the formulation of the marketing mix. Lastly, the technology that the business applies may be gradually outdated. Market-oriented approach In a market that uses the market-oriented strategy, the activities of the business will depend largely on the market. The business will at times make attempts to fulfill the needs that are in the market with little reference, if any, to the internal strengths that the business has. An organization that puts the market-orientation in use has the thought that the asset that is of great importance is its customers. The belief of the firm is that, provided that it has the ability to make an identification of its potential customers, discover and get to know what the consumers want, and lastly produce goods to meet their wants and needs, will always remain successful. Market orientation, being a useful strategy, has the advantages that accompany it. The advantages comprise of, first; the business is supposed to have the flexibility to the alterations witnessed in the demand patterns. Secondly, the business will possess a clear understanding of the wants and needs of its customers through market research. Lastly, new products of the business will have a greater possibility of being successful. However, this type of market strategy also has some disadvantages that accompany it. They comprise of, first, incurring high costs in carrying out market research for the purpose of understanding the market. The business will also undergo continuous internal changes as it attempts to meet the needs of the market. Thirdly, the business will not be able to predict the future, particularly from the staff’s point of view. Lastly, the business may have to abandon the investments meant for an earlier product. Many markets are adapting to the more market-oriented approach since customers have gained more knowledge and are in need of better quality and more variety. For the sake of competition, the business should be very sensitive to the needs of their customers or else they lose their sales to rivals. On another end, several products are perceived to lead to the creation of wants or needs in the customer, particularly products that have a content that is of high technology (Perreault 2010). Mobile phones have changed from being business accessory to a brand item that is for the big consumers, with many gadgets, such as Internet access, video, and pictures. Innovations lead to the creation of the need for the customer rather than waiting for the customer to develop the ability to guess how the technology may develop in the future. Alternative approach Fortunately, there is a third strategy that attempts attaining a balance between being market oriented with being product oriented. This strategy is referred to as Asset Oriented Marketing. Actually, the perfect situation, of course, is the business to match the tastes and preferences of the customer with the internal strengths of the business. For the business to discover what is needed in the market, one question prevails regarding how the business, using the assets, knowledge and assets, skills, and brands, can meet the needs of the customers. Asset led marketing attempts to attain this, while the key term is ‘led’. The assets of the business such as management skills, labor force skills, recognized brands, patents or capital, should be useful in helping in achieving satisfaction of the demands of the consumer. Identification of what the business is good at and relating the strengths to the needs of the customer is what entails this strategy. The relationship between the market needs and internal strengths is supposed to be one of the fundamental rules of any marketing strategy of the firm since this approach lays much of its focus on the opportunities that are most appropriate, with reference to the assets owned by the firm. The method of combining these two factors effectively could be exhibited in carrying out an examination of utilizing database marketing (Mahapatra 2010). The development of database marketing has been facilitated by the invention of store loyalty cards. Analysis of the Marketing Mix In marketing, businesses incorporate the use of the marketing mix. This deals with the method a business makes use of product, price, promotion and distribution in marketing and selling its product. Often, the market mix is referred to as ‘Four P’s’ because the elements that are of much importance deal with the product (the good or service obtained by the customer), price (the amount the consumer pays to obtain the product), place (the method in which the products are distributed to the consumer), and promotion (how the consumer finds and is persuaded to obtain the product). This is referred to as a ‘mix’ since every ingredient has impacts on the other, and the market mix is supposed to suit all the targeted customers. For example, the materials of high quality used in the manufacture of a product may imply that there may be an achievement of a high selling price. The company may carry out an advertising campaign, and this will imply that the area must be well supplied with the product in the campaign for the purpose of avoiding disappointment to the customers. Promotion is necessary for the emphasis of new benefits and features of the product. An operational marketing mix can be described as that which is consistent and balanced, achieves the objectives of marketing, meets the needs of the customer, and enables the creation of a competitive advantage for a business. However, each industry and business will have its specific marketing mix, and hence it varies across firms and industries(Medeiros 2010). References: Hollensen, S. (2010). Global marketing: A decision-oriented approach. Harlow, Essex: FT Prentice Hall. Mahapatra, P. B. (2010). Operations management: A quantitative approach. New Delhi: PHI Learning. Medeiros, F. (2010).A design approach for service-oriented product lines: Designing service-oriented systems as software product lines. Saarbrucken, Germany: LAP - Lambert Academic Pub. Perreault, W. D., Cannon, J. P., & McCarthy, E. J. (2010).Essentials of marketing: A marketing strategy planning approach. Rosinski, Philippe. (2010). Global Coaching: An Integrated Approach for Long-Lasting Results. 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