4.1 Introduction to marketing

A market orientation starts with customer needs and uses research to shape the offer; a product orientation starts with the product and assumes technical quality or features will attract buyers.

Market orientation reduces the risk of building something nobody values, while product orientation can support innovation when customers cannot yet describe a new solution. The choice depends on evidence, capability and market uncertainty.

Identify whether the decision begins with customer evidence or internal product belief, then test the assumption.

A company asks commuters about delays, then designs a simple ticketing app: market orientation. A laboratory launches a technically elegant device without testing demand: product orientation.

Market orientation is not “always follow customers”; it still requires judgement about unspoken or future needs.

Market share is a business’s sales divided by total market sales for the same period and definition. It indicates relative position, not absolute success.

Share can rise because the firm grows, competitors shrink or the market contracts. The result changes if the market boundary, units or revenue measure changes.

State the market and measure, calculate the fraction, then compare share with total market growth and profitability.

A brand sells $2m in a$20m market, so share is 10%. If the market falls to $10m while its sales stay$2m, share rises to 20% but the business has not grown.

A higher share does not automatically mean higher profit, quality or customer satisfaction.

Market growth is the percentage change in total market size over time. It describes the market, not one firm’s sales.

Growth can come from more customers, higher frequency, higher prices or a changing market definition. A firm can lose share in a growing market and still increase sales.

Separate market growth from business growth, specify the period and explain the driver.

A market rises from $50m to$60m, so growth is 20%. If a firm’s sales rise from $5m to$5.5m, its sales grew 10% and its share fell from 10% to 9.2%.

Market growth is not the same as market attractiveness; assess competition, margins and sustainability.

Calculate $\text{market growth}=\frac{\text{current market size}-\text{previous market size}}{\text{previous market size}}\times100$. Use the same market definition, measure, currency and period in both values. A positive percentage means expansion and a negative percentage contraction; it does not by itself reveal whether the change came from volume, prices or a redefined market.