4.1 The role of marketing

Question 1

Product Orientation

Answer 1

Companies are considered to have a product orientation if they prioritise research and development over market research. Product-oriented companies can be thought of as being primarily inward facing.

Question 2

Advantages of Product Orientation

Answer 2

• Products are innovative and can apply for patents.
• It will be a USP for a business.
• The product will be better quality.
• There is likely to be investment in technology at the firm.
• There is little threat from competition.
• There may be economies of scale.

Question 3

Disadvantages of Product Orientation

Answer 3

• There is no guarantee that the product will be sold to the market.
• It is expensive to conduct research and development.
• There may be other opportunities that are missed.
• Branding is narrow.
• There is a risk of the product becoming obsolete.

Question 4

Market orientation

Answer 4

When companies adopt a market-oriented approach, the needs of the customer are put above everything else. Extensive and ongoing market research will be at the centre of all decision making. This means that when new products are developed, they are much more likely to be accepted by the target market.

Question 5

Advantages of Market orientation

Answer 5

• Products are likely to conform to customers’ needs and get sold.
• It results in more focused production and strategy.
• The quality of marketing activities is improved because market needs are understood.
• Repeat custom is likely, which improves long-term profitability.

Question 6

Disadvantages of Market orientation

Answer 6

• Products are less likely to be unique.
• There is more competition.
• It becomes important to get market research right.
• There are challenges in quickly responding to market changes.
• There is a risk of underestimating the customer or market.

Question 7

Social marketing

Answer 7

Social marketing aims to influence behaviour in a way that benefits society as a whole.

Question 8

Market share

Answer 8

Market share = Product sales / Total market sales × 100

Question 9

Market leadership

Answer 9

The market leader is the product or brand with the highest market share. The leader will be able to gain a lot of recognition for its products because the relevant market will already be aware of them and know what they represent.

The advantages for the leader include:
ease of access to channels of distribution
brand recognition
economies of scale
price leadership