Question

Why market orientation is very important for a business plan? (1000 words)

Answer 1

Meet Customer Needs More Effectively A market orientation means that the company is constantly listening to the marketplace to see what customers' most urgent needs are and how these needs are changing. The company stays dialed in to its target markets and tries to bring products and services to market that are a perfect match to these needs. Achieving this close match with what customers want allows the company to gain greater market share with less marketing effort. The company's marketing message focuses on making customers aware of how well the company can meet their needs rather than convincing customers they have a need for the products or services.

Avoid Strategic Mistakes A company with a true market orientation knows when the market isn't ready for a product or service innovation such as a new technology. The company doesn't waste marketing resources to introduce a product that the market will not accept. Costly strategic mistakes can occur as early as the R&D phase of product development. Companies without a market orientation may develop a product that turns out to have an extremely small market. Companies with a market orientation keep the end user in mind during all phases of product development. Their goal is not just to come up with an innovation, but to market innovations that customers have a significant, current need for. Smaller, emerging companies can't afford product failures or ineffective marketing campaigns. Being able to achieve their planned rapid pace of growth requires making each dollar of expenditures contribute to increased sales

Uncover Opportunities Before Competitors With a market orientation, the company's management team is constantly scanning the business environment to spot emerging trends that the company could take advantage of, either by adapting its existing products and services to meet the needs of new target markets, or through designing fresh solutions for new customer problems that are emerging. In many cases, being the first company to actively pursue an opportunity gives it a competitive advantage. Not only can it build market share ahead of competitors, but it can begin to build a loyal customer base that will be difficult for competitors to lure away even if they offer lower prices. Over time a company can gain the reputation as an innovator that consistently brings products and services to market that become winners. The foundation of this success is the management team's diligent efforts at understanding what customers needs are at the present time and predicting what they will want in the future.

Higher Customer Satisfaction All companies seek to achieve high customer satisfaction because doing so increases the chances the customer will come back again and again. A market orientation allows the company to view its customers as individuals with subtle differences in what they need or want. Market-oriented companies take the time to ask customers how satisfied they are with what the company is offering and what the company can do to improve. Customers in turn respond positively when they perceive the business owner appreciates them enough to find out how to serve them better.