What is a ‘Market Orientation’?


What is a ‘Market Orientation’?

To have a market orientation (MO) means to have an organisational culture in which business activities are oriented towards providing customers with superior value. In other words, it’s about the buyer, not the seller or the product.

There are different theorised frameworks for what creates an MO. Narver and Slater (1990) explain that this culture is the result of a triangle of focus – on customers, competitors and through inter-functional co-ordination. All three are equally important.

Management support for a structure of co-operation and communication between teams is essential. So is an understanding of where competitors sit in relation to the needs and wants of these customers. This way the business can find its own strength and area in which to create a value proposition.

Why is having a market orientation important?

Keller, Kotler & Burton (2009) point out that market oriented companies achieve superior performance.

It also helps facilitate product development. It can help uncover niche segments and pre-empt competitors by identifying emerging trends.

I believe that engaging your customer in order to understand them also adds to brand equity. Starbucks, for example, invites loyal customers to suggest new product ideas online, thus using the power of the crowd.

Market Orientation is important for all of these reasons, but today’s organisations need to go beyond what customers express (reactive market orientation). Oftentimes, customers don’t know what they want. ‘Total marketing orientation’ adds a more proactive element to explore latent as well as expressed needs and wants. This requires much probing and listening. Many recent standout products have come from deep consumer insights from researchers / product creators, coupled with creative envisioning and the willingness to take a risk (e.g. ipod, Segway, Go the F*** to Sleep).

How to Increase your level of Market Orientation

This is fundamental to organisational culture and its business processes. Generally it requires enthusiastic support from the top of the company and be filtered all the way throughout.

To increase Market Orientation, organisations need to put systems in place for market sensing and processes in which to use the information.

Cross-functional teams help the communication flow, so a marketing manager might try to have all staff work on frontlines (service) from time-to-time. Supply chain partners can also provide data from their customer / competitor contact.

Market sensing can be aided by technology. Much market scanning of competitors can be done through search engines, the media and ‘Dorothy Dix’ the undercover shopper.

At my previous company we encouraged two-way communication with customers through blog and online forums, and introduced Twitter and Facebook as research and engagement tools, rather than just promotional vehicles.

Formal customer research can be complemented with SurveyMonkey and online quick polls, as can suggestion boxes, one-on-one interviews and customer advisory panels. These can elucidate not only what the customer wants but where competitors may be successful or falling short. This achieves better information for the organisation as well as making customers feel valued, which is a value in itself.

Thanks for reading.