This is an important distinction. Most businesses would today describe themselves as being ‘market oriented’ or ‘market led’. This approach requires market research and market analysis to indicate present and future consumer demand. The consumer is put first – the business attempts to produce what consumers want rather than try to sell them a product they may not really want to buy. It has advantages, especially in fast-changing, volatile consumer markets. In these cases, increasing consumer awareness of competitors’ products, prices and image can result in significant fluctuations in popularity of goods and services.
The benefits of market orientation are threefold: The chances of newly developed products failing in the market are much reduced – but not eliminated – if effective market research has been undertaken first. With the huge cost of developing new products, such as cars or computers, this is a convincing argument for most businesses to use the market-oriented approach. If consumer needs are being met with appropriate products, then they are likely to survive longer and make higher profits than those that are being sold following a product-led approach.
Constant feedback from consumers – market research never actually ends – will allow the product and how it is marketed to be adapted to changing tastes before it is too late and before competitors ‘get there first’. The days of traditional product-oriented businesses, which assume there will always be a market for the products they make, are fast disappearing. However, product-led marketing still exists to an extent and the following instances help to explain why: Product-oriented businesses invent and develop products in the belief that they will find consumers to purchase them.
Introduction to Business Business plays a major role within our society. It is a creative and competitive activity that continuously contributes to the shaping of our society. By satisfying the needs and wants people cannot satisfy themselves, businesses improve the quality of life for people and create a higher standard of living. It is a way for individuals to provide goods and services to ...
The development of the WAP mobile phone was driven more by technical innovation than by consumer needs – consumers were not aware that such versatile products were likely to be made available until the basic concept had been invented and developed into an innovative new product. Pure research in this form is rare but still exists, for example in pharmaceutical and electronic industries. Here there is still the belief that if they produce an innovative product of a good enough quality, then it will be purchased. Product-oriented businesses concentrate their efforts on efficiently producing high-quality goods.
They believe quality will be valued above market fashion. Such quality-driven firms do still exist, especially in product areas where quality or safety is of great importance, such as bottled-water plants or the manufacture of crash helmets. The trend then is towards market orientation, but there are limitations. If a business attempts to respond to every passing consumer trend or market fashion, then it may well overstretch its resources and end up not doing anything particularly well. Trying to offer choice and range so that every consumer need is met can be expensive.