Becoming Market-Oriented

Becoming Market-Oriented

A market orientation is a business perspective that makes the customer the focal point of a company’s total operation.

Becoming market-oriented demands ethical behavior within the organization and with customers, suppliers, and other stakeholders.

Characteristics of Market Orientation

A market-oriented organization continuously gathers information about customers, competitors, and markets; views the information from a total business perspective; decides how to deliver superior customer value; and takes actions to provide value to customers.

Customer Focus. The marketing concept has proposed a customer focus for half a century, yet until the 1990s this emphasis had limited impact on managers as a basis for managing a business.

Competitor Intelligence. A market-oriented organization recognizes the importance of understanding its competition as well as the customer:

Failure to identify and respond to competitive threats can create serious consequences for a company.

Cross-Functional Coordination. Market-oriented companies are effective in getting all business functions working together to provide superior customer value.

Performance Implications. Companies that are market-oriented begin strategic analysis with a penetrating view of the market and competition.

Becoming a Market-Oriented Organization

Becoming a market-oriented company involves several interrelated requirements.

Superior Customer Value. Customer value is the trade-off of benefits less the costs involved in acquiring a product.

Information acquisition. “A company can be market-oriented only if it completely understands its markets and the people who decide whether to buy its products or services.”

P&G’s CEO encourages employees to think of brands as consumers rather than as scientists seeking technical perfection.

A key part of information acquisition is learning from experience.

Cross-Functional Assessment. Zara, the Spanish apparel retailer, is very effective in overcoming the hurdles of getting people from different functions to share information about the market and to work together to develop innovative products.

Shared Diagnosis and Action. Becoming market-oriented requires moving beyond information gathering and analysis to deciding what actions to take to provide superior customer value