Market orientation

Market orientation means organising the business around understanding markets and creating superior value, rather than beginning with an existing product and searching for arguments to sell it. It combines an outward-looking culture with the capabilities to collect intelligence, share it and respond coherently.

When to use it

• To assess whether the firm can understand, anticipate and shape market needs.
• To examine the culture and behaviours that influence customer and competitor decisions.
• To identify weaknesses in intelligence, coordination or responsiveness.

Origins

The underlying marketing idea—seeing the business through the customer’s eyes—predates the formal model. Academic interest intensified in 1990 through two complementary accounts. Ajay Kohli and Bernard Jaworski described market orientation as organisation-wide generation and dissemination of market intelligence followed by responsiveness. John Narver and Stanley Slater described a culture built around customer orientation, competitor orientation and inter-functional coordination that creates superior buyer value.

Both accounts appeared in 1990. They differ in emphasis rather than practical purpose: one highlights organisational activities, while the other highlights the culture that sustains them. Later work developed measures and tested relationships with business performance, including the concise diagnostic associated with Deshpandé and Farley in 1998.

What it is

Market orientation is an organisation-wide discipline. It starts with customer problems and the wider market system, then aligns choices about products, operations, channels and service around the value the firm can create.

The capability view comprises:

• generating market intelligence through research, observation, experiments and customer-facing work;
• distributing relevant intelligence across functions rather than trapping it in marketing;
• responding through coordinated decisions and action.

The cultural view comprises:

• customer orientation;
• competitor orientation;
• inter-functional coordination.

Together they prevent two common failures: product centricity, in which the firm protects what it already makes, and departmental marketing, in which the rest of the organisation treats market understanding as someone else’s job.