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Index Abstract:2 Market orientation:2 Benefits of market orientation3 Barriers to marketing orientation5 Market orientation concept for new business:6 Effects of market orientation on the existing business:7 Mass marketing:8 Role of mass marketing in developing tactical action programmes8 Advantages of Mass Marketing:9 Limitations of mass marketing9 Market Segmentation:9 Advantages of Market segmentation11 Disadvantages of Market segmentation11 Mass marketing versus Market segmentation12 Conclusion:13 References:13 Abstract:
The first half of the assignment deals with the adoption of market orientation as a key principle for guiding the new business as well as the existing one. It gives a clear picture of the role of market orientation in the business industry and how it helps to achieve the business goals and the objectives. The second half of the assignment looks at the advantages and the disadvantages of the mass marketing and the market segmentation. It analyses how both these forms of marketing helps in the business context. Market orientation:
The needs of the customer have got a great importance in the market oriented business. A market oriented business identifies the needs of the customer and will start the process of production of that service or goods which will fulfil the customer needs. In today’s business environment, the company gives much importance to the consumer and will try to identify the needs and wants of the customer. The company will circle around the customer needs (Williams, 1992) Market orientation can be described as the organisation’s information on the customer tastes and preferences.
Market orientation can be defined as a “set of cross-functional processes and activities directed and created at satisfying the customers through continuous needs-assessment” (Deshpande, 1999). Market orientation helps the company to know about their competitor’s strategy and will accordingly help them to implement plans which help the company to maintain their customer strength. [pic] (source: speed et al,2003). Benefits of market orientation: The term market orientation implies an extended view giving equal importance to the customers and the competitors (Kotler and Armstrong, 1994).
Market orientation helps the company to achieve some benefits which are as follows: • Improved business performance: A market oriented company fulfils the expectations of the customer by communicating and identifying about their needs. The company implements the right process and steps in order to develop the product or service. The market orientation helps the company to be in a very good position in the competitive business environment. The company or the organisation will conduct research to identify the opportunities in the market. Communication is the best possible way to identify the needs of the customers.
The organisation with market oriented approach conducts research to know about the strategies of their competitors and the needs of the customers as well. The company implements the plan accordingly to fulfil the customers needs and thereby increasing the profitability of the company(Slater and naver,1992). • Improved customer perceptions and loyalty: The customer needs are giver the prior importance than the production process in a market oriented organisation. This helps the organisation to identify the needs of the customer and implement plans accordingly.
In this way the production needs and the marketing needs are linked. The market oriented approach helps the company to be more responsible to meet the demands of the customer in order to stay in the competitive market environment (Narver and slater, 1992). The best example of an organisation which can be given in this perspective is the Kerala Tourism development corporation. They have made a great progress in the last few years due to the market oriented approach. They identified the tastes and preferences of the Foreign tourist who visit kerala, south India.
They accordingly implemented the plans to help satisfy the needs of the tourists. • Increased creativity and delivering value to the customers: The main characteristic feature of a market oriented firm is the extensive research which they use in order to identify the needs of the customers and satisfy them. They give more importance to the customer needs than to the product process. Market oriented organisations give more importance to the highly innovative production techniques and offer services to customers like delivery, warranty, after sales service etc.
The immediate and strong response to the marketing intelligence is one of the major benefits of market oriented firms. They target the selected market segments, design the new products and modify the existing products to fulfil the customer needs (Kohli and jaworski, 1990). • Improved employee commitment to the organisation: The commitment of the employees increase along with the increase in the market orientation. It also increases the benefits of the employees like psychological and social which the employees spawn from the organisation.
This will automatically result in better co-ordination between the employees of various departments which in turn will help the company to achieve its goals and objectives. This in turn will give employee the job satisfaction and commitment towards the organisation (Jaworski and kohli, 1996) Barriers to marketing orientation: One of the major barriers to the market-orientation is the imperfection of the employees due to lack of experience, lack of skill and political activity. The negative impacts of the politics which is prevailed inside the organisation along with the conflict can be a major barrier(Robertson,1995).
The other major barrier to the market orientation was the lack of co-operation and the co-ordination between the different functional units in an organisation. This is mainly because of the internal politics and also resistance of the employees to change their thinking about the modern practices and the approaches (Wong et al, 1989) Morgan (1990) states that professional culture can be one of the barriers to the market orientation as the professional may have fear about the new methods of working and it can affect their working style.
Unclear marketing objectives are another major barrier to the market orientation. If the organisation does not have proper marketing objectives, then it can lead to confusion among the employees of what exactly the company is expecting from them (Wong et al, 1989). Market orientation concept for new business: Certain factors have to be considered in order to develop market orientation for new business. The company should have a proper idea of what they are actually planning to achieve and what would be their objectives (Hart, 1994).
The organisation should have some concepts which are as follows: • The organisation should be well aware about the business. Customer preference should be given prior importance than the product. • There should be a better co-ordination among the departments to achieve the objectives or goals of the company • Effective communication is also a vital factor. The employees should communicate through proper channel. • Market segmentation is also an important factor to be considered for the success of a new product or business.
The organisation should have proper knowledge about the needs of various segments and should be able to satisfy them • Company should have target customers as the taste and preference of each customer varies from one to another. So the organisation should identify their customers. • The company should have competitive advantage. They should be able to attract the customers to their firm rather than going to the competitors. (Hart, 1994) Market oriented products developed by HP: Hewlett-Packard Computer Corporation developed plenty of market oriented products for the customers.
They introduced some new technology like software which helps the customers to print the data using their mobile phone using the Bluetooth. The company focuses on the internet protocol (IP) which influences the network for the video and voice communication which helps the service providers as well as the customers to save their money. This makes the company to be on top of their competitors. (Annual report, 2003). Effects of market orientation on the existing business: Marketing orientation contributes towards the implementation of the marketing concept.
The marketing orientation is positively related to the performance of an organisation which is measured according to the size, profitability, market share and the growth rate. Marketing orientation helps the company to achieve innovation. The innovation and the market orientation play an important part in the performance of the organisation (Slater and Narver, 1994). An effective marketing orientation may affect the organisation in the following ways: • Identification of rising opportunities and threats in a methodical way. • Making the organisation prepared to transform. Achieving sustainable competitive advantage • Better communication between the employees • Reduces the internal politics that arise between the employees of the organisation. • Maximum utilisation of the available resources. • Consistent decisions and approaches towards various process of the organisation • Implementation of the market focused approach. (Baker,1995). Marketing orientation in Kerala Tourism Development Corporation (KTDC): Kerala Tourism Development Corporation is a state owned enterprise which was incorporated in the year 1956.
Due to high competition in the hospitality industry, Ktdc had to implement some new strategies. They started ayurvedic massage centres to attract the foreign tourists and thus they became very popular. They adopted market oriented approach which made a great progress in their growth . Mass marketing: Mass marketing is a type of marketing in which the products are sold to a large number of customers. Mass marketing is mainly used by the producers or manufacturers who are involved in mass production, distribution and promotion of one particular product to a wide number of customers (Kotler, 1991).
Mass Marketing at HP: Hewlett-Packard deals with many products for a wide range of customers. They mainly deal with the personal computers. Due to high competition in the market, they introduced one new product which is printer and then started supplying to wide range of customers which included the customers from the corporate world as well as for the household use. www. hp. com Role of mass marketing in developing tactical action programmes: Mass marketing is mainly concerned with the marketing of products to a large number of customers.
It plays a vital role in developing the tactical action programmes for an organisation. It helps the organisation to analyse about the competitive behaviour and plan the strategies accordingly. The mass marketing leads the way to innovation and thus helps the company to improve their sales growth(Kotler,1991). The best suitable example which can be given in this perspective is DELL computer corporation which adopted the tactical action programmes through mass marketing. The company which sells pc’s to wide range of customers has implemented marketing strategies through the tactical action programme. ww. dell. com Advantages of Mass Marketing: Mass marketing has got a few advantages which are as follows: • Gives a broad exposure to the product with relatively less investment and it helps to generate a brand image among all categories of people without any unfairness. • Helps to carry out the marketing at very low cost and with high margins • Low promotion costs • Helps to appeal many customers at a time. • Reaches the customers with a unique characteristic due to shared interest. (Kotler, 1991) Limitations of mass marketing:
In spite of the various advantages mentioned above, mass marketing has got some drawbacks also which are as follows: • Increased competition • Increase in the knowledgeable customers • Improved market research methods • Mass marketing cannot communicate to particular individual, household or organisation as it caters to wide range of customers. (Kotler, 1991) Market Segmentation: Market segmentation is the process of dividing the customers according to age, sex, location, behaviour etc to get maximum benefit from minimum investment.
Market segmentation has become more popular in modern day business due to its effectiveness. Market segmentation also involves the identification of certain group of customers who have different behaviour towards the specific marketing strategy (kotler et al, 1991). Bases of Market segmentation: Market can be segmented into two categories; they are consumer market and business market: The consumer market can again be segmented into the following ways: • Geographic segmentation: On the basis of region, city, density and climate.
The marketers use geographic segmentation because of the fact that the consumers may have different taste in different region. For example, McDonalds sells burgers in India using lamb instead of beef because of religious issues. • Demographic segmentation: Demographic segmentation divides the people according to age, gender, income and family life cycle. • Psychographic segmentation: Psychographic segmentation divides the people into lifestyle, social class and personality characteristics. • Behavioural segmentation : On the basis of occasions, benefits, user status etc. Kotler at al,2006). The business market can be segmented into following ways: • Demographic segmentation on the basis of industry, company and location • Operating variables on the basis of technology, user status and customer capabilities • Purchasing approaches on the basis of purchasing function organisation, power and general purchase policies. • Situational factors including specific application and the type of order. • Personal characteristics such as buyer-seller similarity, attitudes towards risk and loyalty (Kotler and Keller, 2006). Advantages of Market segmentation: Helps to identify the new product opportunities. • Identify the customer needs and requirements. • Helps to focus the strategy of the organisation. • Different segments can be identified in terms of different needs • Efficient advertising tactics due to promotion of particular segment. • Helps to receive direct response from the customers. (Kotler and Keller,2006) Disadvantages of Market segmentation: • Increase in cost due to targeting of multiple segments. • Segmentation can lead to propagation of products • Narrow segmentation of the market can obstruct the broadband equity www. 2manage. com Market segmentation used by nivea: Nivea sun is a major international sun care brand, recognised world wide as a leader in sun care brand. The uk market is worth ? 173. 6 million with an overall category purchase penetration of 33%. Nivea sun is used by men, women and children with quality products to meet the needs. Nivea identifies the market segments that meet the individual customer needs. Each segment contains: • Contains customers with similar taste and preferences. • Best satisfied with the products targeted to meet the needs of the customers. (www. hetimes100. co. uk) Nivea has identified three main segments which are as follows: • Men who preferred light- scented deodorants • Women who preferred mildly scented face care. • General purpose creams and lotions for all segments. Nivea introduced my silhouette body gel cream for women which are an age defying lotion. The best feature of this cream gel is that the skin will be more toned and elastic. This attracted many women customers. Nivea conducted product – in use test in which 80% of the customers gave the opinion that their skin has become noticeably firmer.
Nivea introduced dry impact roll-on deodorant for men which features 24-hour effective protection, great masculine scent and no alcohol which is a very unique feature. www. nivea. co. uk Mass marketing versus Market segmentation: From the above analysis it can be assumed that the mass marketing and market segmentation has got its own advantages and disadvantages. Most of the medium and large scale industries are using market segmentation (Kotler and Keller, 2006). Mass marketing is mainly used in the industries like automobile, computer etc. ass marketing is one of the useful form of marketing as it caters to the wide range of customers where as the market segmentation is used only for certain category of people. Mass marketing is now decreasing due to the fact of direct marketing as direct marketing such as interaction with individuals to know about their tastes and preferences. In market segmentation, the company will identify the needs of a particular section of customers and will implement the plans to satisfy their needs. Socio economical and technological changes have made the market segmentation inevitable in the recent years.
The promotion cost is more in market segmentation due to the fact that the company has to target a particular type of market where as in the market segmentation the promotion cost is less due to the identification of customer needs and preferences. Market segmentation can be useful to marketers on the ground that they have many options to choose where as in mass marketing it does not give the option of choosing as it caters to the wide range of customers. The competition is high in mass marketing whereas in market segmentation due to the identification of new opportunities the competition is fairly less. Kotler et al, 2006). Conclusion: From the above analysis, we can conclude that market orientation is one of the essential factors of an organisation. It helps the organisation to achieve the goals and objectives. The study also analysed the adoption of marketing concepts for the new business as well as the existing business and came to the conclusion that market orientation is essential for every organisations irrespective of new or existing ones. The second part of the assignment analysed the benefits of undifferentiated mass marketing and the market segmentation.
The advantages and disadvantages for both were analysed and it can be said that both the forms of marketing is essential from the organisation’s perspective. Industrial examples were taken in order to support the answer. Hewlett –Packard Computer Corporation was taken as an example in the case of mass marketing and nivea was taken in the case of market segmentation. References: Baker, J. M. (1995) Companion encyclopaedia of Marketing. London, U. K. : Routledge. Deshpande, R. (1999) Developing a market orientation. Thousand Oaks, California: SAGE. Hart, Norman (1994). Effective industrial marketing.
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