Market Orientation Essay Example | Topics and Well Written Essays - 2500 words

Market Orientation - Essay Example Several fundamentals of modern business and marketing practices date back to the ancient Greeks, the Phoenicians, and the Venetian traders. The term "marketing concept" was presented first in the1700s by Adam Smith, the Father of Modern Economics. He said that the customer should be made the focus of a business. According to Kohli and Jaworski (1990), the marketing concept is a business philosophy, whereas the term market orientation refers to the actual implementation of the marketing concept. Market orientation involves the production of goods vigilantly researched and designed to appeal to customers. Product orientation, on the other hand refers to the culture where the product is designed and produced without any market research and thus it is unclear whether the product would appeal and satisfy the customer or not. Proponents of Market orientation believe that the customer is the king and so it is important to continually assess and satisfy the changing needs and wants of the customer (Slater and Narver 1994). What does he prefer What product size is most beneficial to him From where does he make his purchases Does he buy in bulk To answer these questions organizations need timely marketing information systems, market research, decision support systems and diffusion of such market intelligence at all levels in the organization (Kohli and Jaworski 1990) Based on extensive interviews with managers and execut... Market Orientation Matrix2 Market orientation is a concept with two major components: (1) customer-focus and (2) competitor-focus. This conceptualization leads to four distinct strategic types. In an ideal world, firms should seek to understand both customers and competitors but resource constraints may lead to trade offs. However, much before a business starts to gather competitive intelligence it must conduct a SWOT analysis for itself. It must know where exactly does it stand in the market. Customer Preoccupied: are firms that stress on gathering customer focused intelligence at the expense of competitor information. According to Von Hippel (1986) a customer oriented approach is important, but focusing on competitors is more important when markets are growing as they serve as 'reference points for later adopters'. Marketing Warriors are firms that focus their attention to who their competitors are, what they are doing, and what do they plan to do. Such firms try to identify their own strengths and weaknesses in order to stay ahead of competition. This may be suitable when demand is predictable and there are few powerful customers. Strategically Integrated: are those firms that assign equal importance to customer and competitor intelligence. According to Day & Wensley a focus largely on either customer or competitors can lead to 'a partial and biased picture of reality.' Therefore a balance between these two is the most appropriate option. Strategically inept: are firms that fail to adapt to the changing market environment and focus only on internal operations, technological advances etc. Since external analysis is an imperative part of strategic planning, failure to do so can be