It has become increasingly necessary for firms to be market orientated. There is no longer a role today for a product oriented approach to business. Discuss and evaluate this statement.

Essay by erickidzUniversity, Bachelor'sA-, April 2004

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It is always suggested that market orientated firms are more likely to succeed in nowadays business. Consumer-centred is considered to be an indispensable factor of modern business. However, as a traditional model of business, product orientation seems to be overly neglected. In what following, an argument for product orientation's existence will be conducted by comparing the nature of different market demands. New concepts such as 'active demand', 'positive demand', 'dynamic demand' and 'static demand' will be introduced to distinguish the demands in depth and help prove the importance of product oriented approach to business.

Market orientation is 'an approach to business which places the requirements of consumers at the centre of the decision making process' (pp.152, Dave, 2000). To be market orientated, firms need to spend a lot of time and resources gathering all the necessary market information. Such knowledge of market includes the size of the market, degree of the competition, consumer behaviour loyalty and key distribution methods.

The firm will then analyse the data carefully and make up their production decision which best cope the market demand or to fill the market gap.

It is always believed that market orientation can bring firms much more confidence and lower their risk when launching a new product. The success of 'Sunny Delight' in UK soft drink market is a good example. Independent told that:

'Within months Sunny Delight had become the biggest selling soft drink in the UK behind Coke and Pepsi, with sales of £160 million a year' (BBC, 2003)

It is the perfect market understanding that helps P&G to achieve the success. Before joining the UK market, the company conducted a long-term market research seeking the gap of the soft drink market. They found out those artificial drinks like Coco-Cola and Pepsi were welcomed by the teenagers but...