Marketing

Market orientation

Market orientation is an approach to business that starts from the perspective of the customer and works back from there

Market orientation is a business strategy that begins with the customer's point of view and works backwards. Some studies have concentrated on the technical qualities required to be market oriented (such as acquiring and using market information), while others have focused on the firm's employees' positive attitude toward their consumers. Market-oriented businesses are more likely to succeed in the long run than non-market-oriented businesses.

When to use it

● To gain a better understanding of your company's ability to address or shape market needs.
● To evaluate your company's internal culture.
● To find ways to improve your responsiveness to market demands.

Origins

The fundamental concept of market orientation is centuries old. 'Seeing the world through the eyes of the consumer' is one of the conventional definitions of marketing. This may sound self-evident, but many businesses get into the trap of being product-centric, focusing solely on the product and ignoring the actual requirements or worries of their potential clients. The goal of market orientation is to help businesses avoid falling into the product-centric trap. Market orientation is a set of tools, approaches, and frameworks that assist businesses better understand their prospective consumers' wants and needs and find out how to better meet those demands.

In the early 1990s, two distinct academic studies sparked renewed interest in the concept of market orientation. Market orientation, according to Kohli and Jaworski (1990), is "the organization-wide development of market intelligence, diffusion of the intelligence across divisions, and organization-wide responsiveness to it." On the other hand, Narver and Slater (1990) described it as "the organization culture that most effectively and efficiently develops the essential behaviors for the generation of superior value for purchasers and, as a result, continual outstanding performance for the firm."

In other words, Narver and Slater concentrated on the firm's overall culture, whereas Kohli and Jaworski focused on individual competencies. From an intellectual standpoint, this disagreement sparked a lot of discussion and reintroduction of the topic. In practice, the distinction is less important because both are clearly important: a market-oriented culture will produce market-oriented capabilities, which will in turn support its culture.

What it is

Market orientation is a style of looking at the world in which a company prioritizes consumer wants and desires over the products and services it offers. Market orientation is about customizing solutions to match the demands of customers, rather than focusing on generating selling points for existing products.

On how to create a market orientation, there are two opposing viewpoints. One viewpoint focuses on the specific capabilities that must be implemented. These are they:
● Market intelligence generation (for example, through market research and customer surveys);
● intelligence transmission across departments;
● organization-wide responsiveness to it.

The other perspective focuses on the culture that a company must build in order to become market-oriented. There are three elements to such a culture:
● customer orientation;
● competitor orientation;
● inter-functional coordination.

Both of these viewpoints emphasize that marketing isn't just about what marketers do; it's about the entire company being aligned around market needs.

How to use it

The concept of market orientation can be applied in two ways. It can first be used as a diagnostic tool to determine how market-oriented different aspects of your company are. The statements below (which should be rated on a scale of 1 to 10) are drawn from a study by Deshpande and Farley (1998) and give a concise manner of gauging market orientation:

● We keep a close eye on our devotion and dedication to meeting consumer needs.
● Across all corporate functions, we freely share information regarding our successful and bad customer experiences.
● Our competitive advantage plan is built on our understanding of client needs.
● We track client satisfaction in a methodical and regular manner. We have routine or regular customer service measures.
● We put the consumer first, unlike our competition.
● I believe that the primary purpose of this company is to serve customers.
● To assess the quality of our products and services, we poll end-users at least once a year.
● Customer satisfaction data is regularly communicated throughout this business unit at all levels.

The concept of market orientation can also be used to guide the development of certain techniques and capabilities. If your company does poorly on this diagnosis, for example, you can conclude that you need more consumer intelligence data or that the issue is with internal coordination. This allows you to concentrate on the weak connection that needs to be fixed.

Top practical tip

Market orientation is an appealing concept, and convincing people that their company should be more market oriented is simple. However, putting that simple concept into practice is much more challenging. The true value of the marketorientation concept is found in the precise tactics and capabilities you use to persuade employees across the organization to take market inputs seriously. This is especially true the further personnel are from clients, such as in a manufacturing facility or a back-office support job.

Top pitfall

When discussing market orientation, one common question is whether the company should always listen to the customer. Listening and responding to the customer is, of course, a wonderful concept. However, you incur the risk of focusing on what customers say they want rather than what they truly want; the other is that you focus too much on your present customers and disregard those who aren't buying your goods. Many individuals prefer the term 'market oriented' over 'customer oriented', because it assures you don't become locked in a restricted vision of what your current customers say they want. You can't be market-oriented without listening, though.