Chapter 2

Market Orientation

Dr P R Bhattacharyya
The 3 Components of Market Orientation

Source: Narver & Slater (1990)

Chapter 2 2
 The Relationship Pyramid

Chapter 2 3
 Types of Products and Services

Chapter 2 4
 Some Early 20th Century Inventions
Consumer Product Attribute Consumer Need Inventors/ Pioneers* Yr. of
product invention

Tin can (for Metallic food storage device Allowed traditionally perishable food to Hall and Dorkin, UK 1810
storing food) be stored for longer periods of time

Ketchup A food condiment, derived from the Chinese fish-based Designed to improve the consumer’s F. & J. Heinz Co., USA 1876
(from the sauce, Ketsiap, but adapted for western taste, using enjoyment of their food by improving
Chinese tomatoes the taste, and reducing the dryness of
word some foodstuffs.
Ketsiap)

Diesel- An engine with an efficiency of 75% (meaning that Enabled independent craftsmen to Rudolph Diesel, Germany 1892
fuelled 75% of the energy produced was used to power the compete with large industry.
internal engine) as opposed to 10% for the steam engines of the
combustion day.
engine

Breakfast Cereals which when added to milk provided a healthy Quick and easy to prepare foodstuff W.K.Kellogg Foundation, 1906
cereals meal which was rapidly adopted as a USA
breakfast meal

Television Transmission of moving images Information, entertainment and Baird Television 1929/1932
education Development Company,
UK/Telefunken, Germany

Microwave Heating device for use in kitchen Allows rapid heating of foodstuffs, Raytheon Company, USA 1946
Oven saving time and labour. Particularly
useful for frozen food meals

Consumer Allowed user to purchase products and services without Convenience of not having to pay Diner’s Club, USA 1950
credit card paying in cash at time of original purchase immediately and provision of credit for
a set period of time.

5
 Industry Analysis: Porter’s Five Forces

1. Threat that new competitors with enter the market

2. Threat posed by substitute products

3. Bargaining power of buyers

4. Bargaining power of suppliers

5. Intensity of rivalry between current competitors

Chapter 2 6
 Analysing the Internal Environment: The Boston Box

High Low

High

Low

Chapter 2 7
 Boston Box: Analysing Present and Future Positions

High Low

High

Low

Chapter 2 8
 Portfolio Issues

• How fast will the market grow?

• What will be our market share?

• What investment will be required?

• How can a balanced portfolio be created from this point?

Chapter 2 9
 The Strategic Context

Chapter 2 10
 The Strategic Context Framework
The Vision - a statement about what an organization wants to
become. It should give shape and direction to an organization’s
future.
The Mission - a broad statement of intention, which sets out an
organisation’s purpose and direction, what it wishes to achieve
in the long term.
Organisational values - define the acceptable interpersonal and
operating standards of behaviour. They govern and guide the
behaviour of individuals within the organisation.
Organisational Goals - the desired outcomes of the
organisation’s various activities. These may be articulated in
terms of profit, market share, share value, return on
investment or numbers of customers served.
Corporate Strategy - the means by which the resources of the
organisation are matched with the needs of the environment in
which the organisation decides to operate.

Chapter 2 11
 Three Key Activities of Marketing Strategy Development

Chapter 2 12
 Strategic Market Analysis

• External Environment - Pestle, Environmental Scanning

• Performance Environment - 5 Forces, Competitor and
Supplier Analysis
• Internal Environment - Resource Analysis

The task is to assimilate the information derived from the

analysis of the environment, and to bring it together in a form

that can be easily understood. To do this two main tools can be

used:

Scenario Planning
SWOT

Chapter 2 13
 Strategic Market Analysis

Scenario Planning
Attempt to understand how trends might influence the future of
an organisation and how managers can gain a better
understanding of some of the uncertainties an organisation faces
if it pursues particular strategies.

SWOT

A series of checklists derived from the marketing audit and the

PESTLE analysis, presented as the internal strengths and
weaknesses, and the external opportunities or threats.

Chapter 2 14
 Strategic Marketing Goals

Chapter 2 15
 Strategic Marketing Growth Goals

• Intensive growth –
concentrating activities on markets and/or products that
are familiar. By increasing market share or by
introducing new products to an established market growth,
growth is achieved by intensifying activities.

• Integrative growth –
an organisation continues to work with the same products
and same markets but starts to perform some of the
activities in the value chain that were previously
undertaken by others.

• Diversification –
developments outside the current chain of value adding
activities. This type of growth brings new value chain
activities because the firm is operating with new products
and in new markets.
Chapter 2 16
 Strategic Market Action

Chapter 2 17
 Five Areas of Strategic Market Action
Competitive - is achieved when an organisation
advantage has an edge over its competitors
when attracting buyers. It has a
superior value proposition.
Generic - there are three generic strategies;
overall cost strategies leadership,
differentiation and focus strategies,
used in order to develop an advantage.
Competitive - Four main positions can be identified;
market leader, positioning challenger,
follower and nicher
Strategic - Strategic Competition & Warfare,
Strategic Cooperation intent
& Relationships
Marketing – organising and implementing the
strategic action. planning
Chapter 2 18
 Marketing Planning

Marketing planning is a sequential process involving

a series of activities leading to the setting of

marketing objectives and the formulation of plans for

achieving them.

(McDonald, 2002 : 27).

Chapter 2 19
 Marketing Planning

Chapter 2 20
 Case Insight – Innocent Drinks

• Innocent make smoothies, a drink made from

pure whole crushed fruit, with no sugar,
preservatives, colouring or nasty additives.
Innocent is now a £100 million business.

• The strong ethical and health credentials

associated with the Innocent brand provide
opportunities for development.

• How could Innocent brand a fruit/water juice, and

would such a product harm the Innocent
brand?

Chapter 2 21
Chapter 2 22