Practices of Market-Driven Companies
Ducker, (Presidential Medal of Freedom winner) said: “The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. ” Practices of the Market Driven The practices of maket driven company can be evaluate by Understanding what the company do, and how they measure the bottom line consequences of their orientation to their markets. Also the most of the company had start adopting the market- driven strategy to understand the logic that all busineess strategic deciosion should start with the distinct & clear understanding the market , customer and the competitors. t requires a customer focus, intelligence about competitors, and cross-functional cooperation and involvement. This initiative extends beyond the marketing function in an organization. Objectives of the Market driven: Market-oriented companies is effective in getting all business functions to work together to provide superior customer value. This objective of the business process helps to improve the overall level of product quality, reduce costs, and also improve service delivery. A market-driven strategy is built with an understanding of the market and the customers that form the market.
The characteristics of market-driven strategies include developing a Market-orientation, leveraging distinctive capabilities, finding a match between customers Value and organizational capabilities, and obtaining superior performance by providing superior Customer value. Superior customer value occurs when the buyer has a very favorable use experience compared to his or her expectations and the value offerings of competitors Distinctive capabilities are a key part of developing a market-driven strategy.
Distinctive capabilities are superior to the competition, difficult to duplicate, and applicable to multiple competitive situations. Capabilities need to be identified and analyzed, market sensing and customer linking capabilities and necessary organizational changes implemented. The major dimension of market-driven strategy is to provide an essential view relating to the development of business and marketing strategies. Evaluating the customer and competitors: The two largest sides to the market equation are the customers and competitors.
If your organization is evaluating itself in terms of customers, they should determine who will be your customers, what the customer’s value & how you will compete, and how your customers perceive you. It may choose to take a more competitor-focused approach, with the objective of beating your competition in cost, functionality or quality. To achieve superior customer value, company requires superior understanding of what creates value for customers. Customer satisfaction Indicates how well the product use experience compares to the buyer’s value expectations.
Superior customer value results from a very favorable use experience compared to expectations and the value offerings of competitors. The drawback with the customer approach is not paying enough attention to the competition. The drawback with the competitive approach is not being customer oriented enough. How will you compete? A company can be market-oriented only if it completely understands its markets and the people who decide whether to buy its products or services. ” The company can compete by following keys that are how is your market segmented? Which segments have the most attractive competitive opportunities?
What segment best aligns with your competencies? What segment is most risky? You need to carefully identify your competitive strategy. What are you going to focus on – cost, functionality, quality, customization or speed? How exactly will you differ from your competition? Characteristics of market driven: a. primary objective is to provide customer superior and maximum value b. strategy should be focus on the marketing management like segmenting, targeting and positing c. they should improve the customer services, quickly respond to the customer changing needs
Process of the market driven strategy:- ? Segments ? Value opportunities ? capabilities/segment match ? Target ? Positioning To get a product or service to the right person or company, a marketer would firstly segment the market, then target a single segment or series of segments, and finally Position within the segment Market Segmentation is the process of placing of subsets of buyers within a market that share similar needs and demonstrates similar buyer behavior. Segmentation aims to match groups of purchasers with the same set of needs and buyer behavior.
A segment is a possible market target for an organization competing in the market. Segmentation offers a company an opportunity to better match its products and its capabilities to buyer’s value requirements. Customer satisfaction providing a value offering that matches the value proposition considered important by the buyers in a segment. There are many ways that a segment can be considered. For example: * By geography – such as where in the world was the product bought. * By psychographics – such as lifestyle or beliefs. * By socio-cultural factors – such as class. By demography – such as age, sex, and so on. A company will evaluate each segment based upon potential business success. Opportunities will depend upon factors such as: the potential growth of the segment the state of competitive rivalry within the segment how much profit the segment will deliver how big the segment is how the segment fits with the current direction of the company and its vision. Examining the opportunities and capabilities of the specific market segments helps identify how to -: 1. Attain a closer match between buyer’s value preference’s and the organization’s capabilities 2.
Compare the organizations strengths and weakness to the key competitors in that particular segment. Market targeting To define a target market requires market segmentation, it mean breaking of market into segment then concentrate & target on each market segment. The beauty of target marketing is that it makes the promotion, pricing and distribution of your products and/or services easier and more cost-effective. Target marketing provides a focus to all of your marketing activities. Through segmentation, a firm divides the market into many segments. But all these segments need not form its target market.
Target market signifies only those segments that it wants to adopt as its market. A selection is thus involved in it. In choosing target market, a firm basically carries out an evaluation of the various segments and selects those segments that are most appropriate to it. As we know that the segments must be relevant, accessible, sizable and profitable. Positioning involve implementing our targeting. Although there are different definitions of Positioning, probably the most common is: “A product’s position is how potential buyers see the product”, and is expressed relative to the position of competitors.
Positioning is a platform for the brand. It facilitates the brand to get through to the mind of the target consumer. In Brief summary, the market driven just needs to understand the needs, wants and the behavioral of the customer, competitors and the markets. Company should adopt the market strategy, in order to deliver the superior value to customer as a primary objective and they must possess certain capabilities that are market awareness, Organizational flexibility, strategic vision, and external relationships.