Key Idea: Marketing starts with the customer: who they are, what they want, and how the business stands out to them. This topic is the orientation a business takes, how its place in the market is measured, and how it chooses and wins its customers.
Orientation
- Market orientation: find out what customers want, then make it.
- Product orientation: make the best product, then find buyers.
- Lena opened Station Road for breakfast and lunch because customers asked.
Share and growth
- Market share = the firm's sales ÷ total market sales × 100.
- Market growth = (this year − last year) ÷ last year × 100.
- Lena's: $960,000 of an $8.0m town bread market = 12%.
Branding and targeting
- Brand awareness, development, loyalty and value.
- Segment the market by geography, demographics, lifestyle or behaviour.
- Target the segment the business can serve best.
The words to know
| Word | Means | Do not confuse with |
|---|---|---|
| Market orientation | a business that researches what customers want before making it | product orientation, which starts from the product |
| Market share | a firm's sales as a percentage of the total sales in the market | market size, the total sales of all firms |
| Market growth | the percentage change in the size of a market over time | a firm's own sales growth |
| Brand awareness | how far customers recognise a brand | brand loyalty, which is buying it again and again |
| Brand value | how much a brand adds to what customers will pay or what the business is worth | the price of the product |
| Market segment | a group of customers with similar features or needs | the target market, the segment chosen |
| Target market | the group of customers a business aims its products at | the whole market |
For a definition: the plain meaning, with the one word that makes it exact ('recognise', 'percentage of total market sales'). For a calculation: formula, figures, answer with %. For an explanation: the idea, then the case.
Exam-style question
Lena's Bakery Ltd aims its Station Road shop at commuters who pass the station between 6.30 and 9.00 a.m. and want breakfast. Define the term target market.
Model answer plan
See the mark-by-mark plan — for / against / judgement, with marking guidance — in study mode.
Important: Market share divides by the total market the case names: the town, the region or the country. Dividing by the wrong total gives a wrong share. And a segment is any group; the target market is the one the business chooses.
Tap each card to check yourself.
Priti bakes one perfect sourdough and hopes people will buy it. Which orientation? Product orientation. She starts from the product, not from what customers want.
The town bread market grew from $7.5m to $8.0m. Market growth? ($8.0m − $7.5m) ÷ $7.5m × 100 = 6.7%.
45% recognise the Lena's logo; 20% name Lena's unprompted. Which figure is brand awareness? 45%: awareness is recognising the brand. Naming it unprompted (20%) shows an even stronger hold.
Name two ways to segment a market. Any two: geographic, demographic, psychographic (lifestyle), behavioural.
One benefit of brand loyalty? Loyal customers keep buying even when a cheaper rival, like Goldcrust's $2.20 loaf, is near.
Why might a business stay product-orientated? When the product itself is the reason people buy, such as an expert craft or a new invention.
Exam tips
- Market orientation asks first; product orientation makes first.
- Market share uses the total market the case gives, with the % sign.
- Keep brand awareness (recognition) and brand loyalty (repeat buying) apart.
- A target market is a chosen segment: name who they are in the case.
- Define the term in general words before you add the example.