Asset versus market-led marketing (A level BS)
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Asset-led Marketing
This type of marketing tries to fulfil consumer wants through the utilisation of the core-competence(s) of a business.
A core-competence is an asset that benefits consumers, is hard for competitors to imitate and can be used on various products in various markets.
Core-competences can be human (e.g., the workforce), physical (e.g., distribution, manufacturing) and intangible assets (e.g., brand name, image).
This is usually the preferred option for businesses with customers that are highly brand-loyal.
Advantages
- It is a proactive way to develop products; does not always look to fulfil existing needs but can create new ones
- Benefits from economies of scale: utilising existing assets is cheaper for the business
- Helps create brand loyalty which should increase revenue
- Costs for future products are easily estimated
Disadvantages
- Does not react as quickly as market-led marketing to changes in demand
- The market is ignored, at the risk of having little demand for the product or service produced
- Particular problems with core-competences are replicated for each new product or service
Market-led Marketing
This type of marketing sees the needs of the customer of utmost importance and therefore uses market research to identify and help respond to these needs.
Market-led marketing is highly responsive to changes in the market and changes in consumer tastes.
It focuses on building relationships with suppliers and consumers. Customer servility is said to exist in the relationship between customers and suppliers, meaning that the business is subservient to the customer.
Advantages
- More flexible than asset-led marketing
- Opens up a wider target audience if a business is pushed into a new market
- Focuses on relationships with customers leading to high customer satisfaction
- Highly responsive to (changes in) customer demand
Disadvantages
- Expensive to continually carry out market research
- Risky as the business may not have the applicable resources to meet customer wants
- Reactive way of developing products, showing a lack of innovation
- Business may be inexperienced in new markets
External Links
- Philip Allan Handbook - Asset-led and Market-led Marketing
- British Airways: Asset-led or Market-led?
--MatPhillips 08:12, 15 October 2008 (UTC)
