Market Orientation

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.

RELATED TERMS
  1. Product Differentiation

    A marketing process that showcases the differences between products. ...
  2. Productize

    To take a new service, product or product feature - that a company ...
  3. Customer

    An individual or business that purchases the goods or services ...
  4. Michigan Leadership Studies

    A well-known series of leadership studies that commenced at the ...
  5. Target Market

    The consumers a company wants to sell its products and services ...
  6. Market Leader

    A company that has the largest market share in an industry, and ...
Related Articles
  1. Markets

    Consumer Sentiment: A Tale of Two CEOs

    These two CEOs of companies owned by Berkshire Hathaway have different views on the health of the consumer. Here's why.
  2. Markets

    Vital Link: Manufacturing And Economic Recovery

    Manufacturing output is one of the clearest signs that an economy is recovering from a recession.
  3. Entrepreneurship & Small Business

    Understanding Product Differentiation

    Product differentiation is a marketing tool companies use to distinguish their products or services from the competition’s.
  4. Markets

    Understanding the Product Life Cycle

    Product life cycle is the period of time during which a product is conceived and developed, brought to market and eventually removed from the market.
  5. Entrepreneurship & Small Business

    5 Steps To A Small Business Marketing Plan

    Here are some tips for marketing your small business.
  6. Markets

    Sector Spotlight: Rise of the Disruptor Brands

    Find out how the success of technology-based companies like Facebook, Netflix and Uber has helped drive consumer expectations to extraordinary heights.
  7. Entrepreneurship & Small Business

    10 Breakout Ideas For Small Businesses

    If your business has hit a wall, we've got the answer to break through and increase sales and earnings.
  8. Trading

    Qualitative Analysis: What Makes A Company Great?

    To understand the qualities that make for a great company, investors must dig deep into "soft" metrics.
  9. Managing Wealth

    Common Interview Questions for Personal Bankers

    Discover how to prepare for your next personal banking job interview by showing your passion for personal finance and desire to help people reach their goals.
  10. Entrepreneurship & Small Business

    Understanding Market Research

    Market research is the process a company uses to assess the viability of a new product or service.
RELATED FAQS
  1. What are the similarities between product differentiation and product positioning?

    Learn how two marketing strategies, product differentiation and product positioning, are similar and work together to effectively ... Read Answer >>
  2. Are Vanguard target retirement plans 2050 worth investing into?

    I understand 90% are invested into stock market and 10% in bonds.    ... Read Answer >>
  3. Should a small business test the substitution effect on its products before launch?

    Explore the substitution effect and find out how small businesses may evaluate how this principle impacts their own products. ... Read Answer >>
  4. How can small businesses manufacture demand?

    Create demand for a small business product or service by focusing on the brand and market. Continue to learn offer excellent ... Read Answer >>
  5. What factors should a company consider when creating a marketing budget?

    Understand the process of creating a marketing budget, and learn the specific factors that should be considered for any company ... Read Answer >>
  6. What are the four types of economic utility?

    Understand the four main types of economic utility that apply to transactions between consumers and businesses: form, time, ... Read Answer >>
Hot Definitions
  1. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  2. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  3. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  4. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  5. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
  6. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is ...
Trading Center