M2-FULL - Marketing Principles and Processes Module 2...

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Marketing Principles and Processes Module 2 Market Orientation Variation in demand The changing supply is always changing buyer’s preferences (demand) Variation in supply Changing demand changes supply (products and processes) that changes the economic structure that changes the social and political structure of an economy. Supply shifts to serve the variation in demand (market segments) that is most profitable. Supply competition forces sellers to try new ways of serving customers and reducing costs Suppliers learn by doing and observing other suppliers how to add customer and shareholder value. Effective products, services and processes are innovated, imitated and improved. Suppliers who implement effectively, efficiently and faster are more competitive Suppliers with superior market orientation skills and business development planning skills are more competitive Suppliers with an insatiable improvement drive are more competitive. Markets are always in disequilibrium. Competition increases as supply exceeds demand. As described in the What is Marketing competitive dynamic, the organization that is market oriented (gathers good market intelligence, analyzes it, disseminates it, learns from it and then responds to the intelligence) is competitively successful. This chapter prepares your minds to do this. Louis Pasteur, the developer of the germ theory of disease and inventor of pasteurization said, “In the fields of observation chance favors only the prepared mind” in a lecture at the University of Lille, December, 7 1854 (see Wikipedia.org) Peter R. Dickson ©Backbone Press 2010
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Chance favors the prepared mind 1 . W hat is market orientation? Chance favours the prepared mind and an organization that gathers market intelligence, analyzes it, disseminates it, learns from it and then responds to it is favoured by chance. In this module we learn how to do this. It is called market orientation. 1. Analyzing Competition As explained in the theory of competition in Module 1, we must study supply and how it is changing. What is the competition that your products and services face and how it is changing? Economics defines four different supply environments: No competition – occurs when there is a single supplier of a particular product, such as a regional electrical utility that has control over price, quality and quantity supplied. A monopoly is often government regulated and regulators often undertake financial audits and customer satisfaction surveys to check on whether the monopoly is making excessive profits and satisfying customers. Trends revealed in this publicly released information can be used by a potential new entry to argue against the continuation of the monopoly. In many countries there has been a shift away from state supported and regulated monopolies toward state regulated oligopolies because competition, even if only between two suppliers, gives consumers choice, which encourages innovation and price competition. Oligopolistic competition
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This note was uploaded on 04/11/2011 for the course MRKT 3023 taught by Professor Biritella during the Spring '11 term at FIU.

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M2-FULL - Marketing Principles and Processes Module 2...

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