Your company has decided to enlist a market research agency to help you establish product or service viability, discover new market trends, keep ahead of competitors, reduce risk, and increase profitability. But first, you need to discover if your company is market- or product-orientated as this will allow you to know what direction the research will be guided in.
The characteristics of a market-orientated company:
In a market-oriented company, the focus falls solely on what customers need or want and then products or services are created around these. Customers will usually create a demand for what they need and thus a market-orientated company will aim to provide the supply for that demand. The aim is to create satisfied customers.
Products are tailored to the demands of the market instead of tailoring the market to the product or service. Market research will thus determine how much of a product needs to be produced and what products customers want on the market. Anything that does not meet the demand of the customers is scrapped or altered instead of simply focusing on a new market.
In a market-orientated company a great deal of money is subsequently spent on advertising and a brand is cultivated over time to influence purchasing behaviours. Market research will thus aim to discover the target market and what they need so that products can be tailored towards fulfilling that need in the market.
The characteristics of a product-orientated company:
The focus of a product-orientated company is on product and profitability, and not on customer needs. The mentality is usually that the product will sell itself. Products and services are produced first and then the company looks for the customers or market who will want the products or services.
As many products as possible are manufactured at the cheapest price. Usually if the product is not selling, or the customers do not like the product, the product itself is not altered, instead the company looks for a new market.
Advertising is not the focus of a product-orientated company. The company sees itself as fulfilling an already-existing need with the view that if the customer is aware of the product, and can afford it, they will buy it. Product-orientated companies will likely use market research to discover markets that suit their products instead of the other way around.