What Is Market Orientation?

Market orientation is an approach to business that prioritizes identifying the needs and desires of consumers and creating products that satisfy them.

It may sound obvious, but advocates of market orientation argue that the conventional approach is the opposite. That is, marketing strategies focus on establishing key selling points to promote existing products rather than designing products that have the qualities consumers say they want.

How Market Orientation Works

Market orientation is a customer-centered approach to product design. It involves research aimed at determining what consumers view as their immediate needs, primary concerns, or personal preferences within a particular product category.

Additional data analysis may also be employed to reveal trends and consumer desires that are not specifically expressed. A knowledge of these trends ideally can help product developers meet or even anticipate consumer needs. They may even inspire improvements that the consumer was not aware of as being an option.

This allows a company to focus its product development efforts on the characteristics that are most in demand. With an increasingly global economy and the proliferation of choices for consumers, companies adapt to a market orientation in order to stay competitive.

Advantages of Market Orientation

Market orientation often includes improvements in customer service and product support geared to solving concerns raised by consumers. This helps ensure customer satisfaction remains high with the company as a whole and promotes brand loyalty and positive word-of-mouth advertising. 

At times, market orientation may reveal customer desires that are simply not cost effective or practical. The business then must determine how to meet customer expectations in the best way possible.

At the very least, impractical ideas may inform long-term development strategy. Options that are not cost effective today may become quite possible down the line.

Market Orientation, Product Differentiation, and Sales Orientation

Development focused on market orientation puts consumers' desires first, creating the product around their expressed needs and wants.

Product differentiation is an advertising strategy that aims at clearly identifying the attributes that distinguish a brand from its competitors.

Sales orientation focuses on persuading the consumer into immediate action through means such as television commercials and in-store demonstrations.

Any or all of these approaches may be required for a successful marketing strategy, but most businesses focus on one as a primary focus.

Examples of Market Orientation

Amazon is an example of a market-oriented company. As it has grown and developed, it has consistently added processes and features that clearly address concerns and desires expressed by consumers. A couple of examples:

  • Many consumers, especially city dwellers, worry about getting packages delivered when they're not at home. The company responded with Amazon Locker, a network of self-service pickup boxes.
  • Delivery charges, no matter how reasonable, are a chief irritant to consumers, and a reason to buy locally instead of ordering online. Amazon Prime charges an annual fee for free delivery of most of its products.

Coca-Cola is another company that is famous for its market orientation. Considerable research goes into identifying new flavors that consumers will actually like, such as wild strawberry and lime. But those new flavors won't help Coca-Cola address the increasing health consciousness of consumers. That's why the company has recently acquired brands including Dasani, Honest Tea, Smartwater, Simply Orange, Minute Maid, Odwalla, and Vitaminwater.

Key Takeaways:

  • Market orientation is a strategic focus on identifying consumer needs and desires in order to define new products to be developed.
  • Established businesses like Amazon and Coca-Cola use market orientation principles to improve or expand their products or services.
  • Even consumer demands that are impractical today can inform long-range decision-making.