Summary: The Effect Of A Market Orientation On Business Profitability A1Mcm

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• 1 Introduction

• What is the approach to business named market orientation?

  It prioritises identifying the needs and desires of consumers and creating products and services that satisfy them.

• What is the main problem regarding market orientation, even though it seems to be the centre of marketing management and strategy today?

  There is no valid measure of it or evaluated influence on business performance.

• 2 Market Orientation and Performance: The Conceptual Model

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• What must an organisation create in order for it to have an excellent market performance? (to create superior value)

  Attain SCA, Sustainable Competitive Advantage in other words Sustainable Superior Value for its clients.

• What is the logic of SCA?

  A buyer that purchases product A, which should satisfy his need, should perceive that the expected value to him of that product is better than the expected values of other options.

• What is the value of what a seller is offering to a buyer?

  This is the difference between what a buyer perceives as the expected benefits and as its expected total acquisition and use costs.

• Name the 2 core trends that lead to many potential sources of SCA?

  1. Creating additional advantages for a buyer;
     
  2. Reducing total purchase - acquisition - costs and use costs.

• 2.1 On the content of Market Orientation

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• What 3 behavioural components (equally important) does market orientation consist of? And what 2 decision criteria?

  1. Customer orientation;
     
  2. Competitor orientation;
  3. Interfunctional coordination.

  • long-term focus;
  • profitability.

• What is the definition and understanding of customer orientation?

  To understand what your customers want now and what they want in the future as such being relevant satisfiers of what they want. (understand a buyer's value chain)

• What is the definition and understanding of Interfunctional coordination?

  Coordinated use of company resources. It is necessary that each area perceives its own advantage by cooperating with the other areas, so they become dependant.

• 3 On Developing a Valid Measure of Market Orientation

• There is evidence for convergent validity, discriminant validity and concurrent validity which means that we can substantiate the Construct validity of the 3 components of market orientation. What is Construct validity?

  The extent to which the measurements, here questionnaires, test the hypothesis or theory that is measured. The patterns of correlations should be confirmed by what is stated in theories.