2. Answer the questions.

1. What is production orientation?

2. Why was production orientation possible?

3. Why can new products stay at a market only for a limited period?

4. What is marketing orientation?

5. Is Adam Smith’s point of view on the demand true today? Why?

6. How can commercial success be achieved?

Unit 2. The Marketing Concept

Read and translate text 1. Answer the question given in the title.

Text 1.

Is Marketing Research Important?

Marketers gather information to back up vital decisions, especially those where large sums of money are at stake, as in new product launches. They need to know when, where, how and why buyers make their purchases. They also need to know who their buyers are, what they think and feel, what opinions and attitudes they hold and how these motivate their purchasing behavior.

Carrying out research is generally the first step in any properly planned marketing campaign. Market research, which involves the investigation of specific markets, is, in fact, only a small part of the much broader process of marketing research, which involves analysis of every aspect of the marketing sequence, covering consumers' needs, attitudes and buying behavior as well as their reactions to the product itself and the way it is priced, promoted and distributed.

Marketing research can provide the answers to a huge variety of 'what if?' questions. What if we increase the price, change the packaging, introduce new advertising, change the product formulation? Most importantly, it can provide the answer to the bottom line question known in marketing as 'Do the dogs like the dog food?'

One US company devised a cake mix that was so simple all buyers had to do was add water. But when the product was launched, sales were disappoin­ting. Research revealed that consumers felt as if they were cheating when they used the mix - they did not feel that they had actually baked the cake them­selves. As a result, the company changed the formula so that a fresh egg now had to be added. The new cake mix was re-introduced and proved to be a resounding success!

Many firms benefit from marketing research which provides them with this kind of valuable insight into what are often quite small and seemingly insignifi­cant aspects of their marketing operations. Thorough market research can make the difference between success and failure. This is why firms generally base their plans and decisions on detailed, accurate and up-to-date information which has been systematically and objectively gathered. Research cannot, of course, eliminate business risk but it can greatly reduce the guesswork element, which helps to reduce the possibility of an expensive mistake being made. Would the Sinclair C5 have been launched if extensive market research had been carried out beforehand?

It is, however, notoriously difficult to gauge the likely consumer reaction to highly innovative products which are unlike anything else on the market, as consumers tend to dislike products they cannot visualize. In fact, if companies always needed research findings they would never launch radically different products at all. For instance, the Sony Walkman was launched despite research that warned it would be a complete flop. In the event, Sony decided to ignore the research and went on to reap the marketing coup of the decade. It goes to prove that decisions made on the strength of research recommendations should always be taken in the light of managers' experience and judgment and in terms of their 'feel' for the market.

Nevertheless, although there may be times, as with the launch of highly innovative products, when it makes sense to distrust research findings, in the majority of cases properly conducted research is a reliable predictor of market performance. The role played by thorough market research in the successful development of a product such as Hob-nobs illustrates this most clearly.

Read text 2.