What is 'Market Orientation'
Market orientation is a company philosophy focused on discovering and meeting the needs and desires of its customers through its product mix. Unlike past marketing strategies that concentrated on establishing selling points for existing products, market orientation works in reverse, attempting to tailor products to meet the demands of customers. In essence, market orientation can be thought of as a coordinated marketing campaign between a company and its customers.
BREAKING DOWN 'Market Orientation'As was proved in the recent history of the automobile industry, the idea that companies can create a product and sell its features to an eager buying public is no longer concrete. With an increasingly global economy and more and more choices for consumers, companies must be willing to adapt their market orientation to stay competitive.
Market orientation is a customer-centered approach to product design. A variety of research is often conducted to determine what consumers view as immediate needs, primary concerns or personal preferences. This allows a company to focus product development funds on the characteristics that are most in demand at the time in the hope of fulfilling consumer desires through their product choices.
Additionally, market orientation provides for customer service and support improvements geared towards specific consumer desires. This helps ensure customer satisfaction remains high with the company as a whole and can function as a way to promote brand loyalty and positive word-of-mouth advertising.
Further Data Analysis for Market Orientation
Beyond the consumer stated needs or wants, additional data analysis may reveal trends or consumer desires that are not specifically expressed. These trends, even when not specifically expressed, can allow the product to develop in intuitive way, attempting to anticipate consumer need before it becomes obvious. This can include improvements that the consumer may not be directly aware of as being an option.
Pitfalls of Market Orientation
At times, market orientation may reveal customer desires that are not cost effective to implement. This leaves the business in a position to have to determine which consumer stated needs will yield optimum returns for the business while still meeting general customer expectations or needs. This also promotes long-term development strategy as options that are not cost effective today may become cost effective down the line.
Market Orientation Compared to Product Differentiation and Sales Orientation
Development focused on market orientation put consumer desire first, creating the product around their expressed needs and wants. Product differentiation puts additional focus on product development and marketing their decisions to the consumer. Sales orientation focuses less on the customer and the product and instead redirects their energies toward the act of selling through various advertising-driven mechanisms, such as television commercials and sales calls. While some level of all approaches may be required for an overall successful marketing strategy, most businesses focus on one as a primary concern above the others.