Question

Compare and contrast a responsive with a proactive market orientation. Be sure to discuss the pros and cons of each, as well as the types of approaches used to gather information for each orientation.

Answer 1

Market Orientation is described as the implementation of marketing concept.

Difference- A responsive market orientation is defined as business's attempt to discover, understand and satisfy the expressed needs of customers while a proactive market is business's attempt to discover, understand and satisfy the latent needs of customers. Latent needs of customers are no less real than expressed needs, but they are not in consciousness of customers. By discovering and satisfying the latent needs of customers the firm is leading customers in ther satisfaction, that implies proactivity in anticipatory level. A responsive market oriented firm focuses largely on the domain of the firm's current knowledge and experience and provides an indepth understanding of the current customers and their expressed needs. It's innovation of product lies on the efficient integration of knowledge closely related to the extant experience to satisfy expressed customer needs. in contrast  proactive market oriented firm explores new and diverse information,  knowledge and market significantly distant from extant ecperiences. Thus this approach takes a firm beyong the scope of it's current experience and experimentation to discover and satisfy the unexpressed customer needs. From the perspective of organizational learning responsive market orientation reflects exploitation behaviours that search for proximity, refinement, efficiency and implementation whereas the proactive market orienation reflects exploration activities that search for discovery, variation, innovation and risk taking.

Pros and cons of Reactive market orientation

Cons- Reactive strategies usually are more conservative because you wait for external influences before taking action. This can protect against wasted investments or unnecessary moves that damage current success. However, companies that rely too much on reactive strategies may miss new or emerging business opportunities. In extreme cases, companies react too slowly to industry or market evolution and succumb to more aggressive competitors with advanced offerings.  

Pros- A reactive strategy doesn't mean your business waits for crises to plan. Instead, you develop a strategy with more of a wait-and-see approach. For instance, if sales decline, the response may be to invest in promotions or to clearance remaining inventory ahead of a new product launch. In marketing, a reactive strategy is a plan for response in the wake of criticism or negative events that impact your brand.

Pros and Cons of proactive market orientation

Pros- Firm continuously discovers new approaches for target markets. It is considered as more appropriate approach as firm is already prepared for potential risks and it easily venture into new ideas. proactive market orientation is more compatible with the concept of market driving.

Cons- It more focuses on dodfing the risks and protecting a firm hence it can lose out in an competitive market. Firms can be less competitive.