Market orientation perspectives include the
decision-making perspective (
Shapiro, 1988),
market intelligence
Market intelligence (MI) is gathering and analyzing information relevant to a company's market - trends, competitor and customer (existing, lost and targeted) monitoring. It is a subtype of competitive intelligence (CI), which is data and info ...
perspective (Kohli and Jaworski, 1990), culturally based behavioural perspective (Narver and Slater, 1990),
strategic perspective (Ruekert, 1992) and
customer orientation perspective (Deshpande et al., 1993).
The two most prominent conceptualizations of market orientation are those given by
Ajay Kohli and
Bernie Jaworski (1990) and Narver and Slater (1990). While Kohli and Jaworski (1990) consider market orientation as the implementation of the
marketing
Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emph ...
concept, Narver and Slater (1990) consider it to be an
organizational culture.
Kohli and Jaworski (1990) defined market orientation as ''"the organization-wide generation of market intelligence, dissemination of the intelligence across departments and organization-wide responsiveness to it"''.
According to them, the marketing concept is a business philosophy, whereas the term market orientation refers to the actual implementation of the marketing concept. They added that "a market orientation appears to provide a unifying focus for the efforts and projects of individuals and departments within the organization."
On the other hand, Narver and Slater (1990) defined market orientation as ''" the organization culture that most effectively and efficiently creates the necessary behaviours for the creation of superior value for buyers and, thus, continuous superior performance for the business"''.
[Narver, J.C. & Slater, S.F. (1990). The effect of a market orientation on business profitability. Journal of Marketing, 54(4), 20-34.]
As such, they consider market orientation to be an organisational culture consisting of three behavioral components, namely, i) customer orientation, ii) competitor orientation and iii) interfunctional coordination; and two decision criteria, namely, iv) long-term focus, and v) profitability. However, during the scale validation process, the items for long-term focus and profitability did not meet the reliability criteria and were removed. Empirical study found that among all three behavioral components, interfunctional coordination, especially those between R&D and marketing has the most significant influence on new product success.
The shifting source of competitive advantage
Niraj Dawar argues that competitive advantage is shifting from a firm’s “upstream activities” such as sourcing, production, logistics and product innovation to “downstream activities”. In doing so, Dawar expands on the notion of market orientation: Instead of bringing better products to market or increasing operational and asset efficiencies, downstream activities focus instead on what else the firm can do for the customer: The core focus of the business has tilted from product and production, to customers and the market. Thus, competitive advantage exists externally to the firm, enabling the company to build lasting differentiation by creating new forms of customer value. Consequently, it is the firm’s perceived position in the eyes of the customer that matters, in the context of shifting purchase criteria, and not product innovation.
Customer perceptions can be shaped through an increased focus on building trust, changing the customer’s purchasing criteria and defining the competitive set. By also tailoring the offering to specific consumption circumstances and reducing customer costs and risk, value is created for customers through downstream innovation. Finally, the firm can build accumulative competitive advantage from network effects and also by accumulating and leveraging customer datasets.
Measurement scales
In order to measure market orientation, the two most widely used scales are MARKOR and
MKTOR
The MKTOR scale is a 15-item, 7-point
Likert-type scale, with all points specified. In this measure, market orientation is conceptualised as a one-dimensional construct, with three components, namely: customer orientation, competitor orientation, and interfunctional coordination. The simple average of the scores of the three components is the market orientation score.
On the other hand, the MARKOR scale is a 20-item, 5-point Likert scale, with only the ends of the scale specified. Here market orientation is again composed of three components, namely: intelligence generation, intelligence dissemination, and responsiveness.
Evaluation Scales (Deshpande 1998)
* Our business objectives are driven primarily by
customer satisfaction
Customer satisfaction (often abbreviated as CSAT) is a term frequently used in marketing. It is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number of ...
.
* We constantly monitor our level of commitment and orientation to serving customer needs.
* We freely communicate information about our successful and unsuccessful customer experiences across all business functions.
* Our strategy for competitive advantage is based on our understanding of customers’ needs.
* We measure customer satisfaction systematically and frequently.
* We have routine or regular measures of
customer service
Customer service is the assistance and advice provided by a company to those people who buy or use its products or services. Each industry requires different levels of customer service, but in the end, the idea of a well-performed service is that ...
.
* We are more customer focused than our competitors.
* I believe this business exists primarily to serve customers.
* We poll end user's at least once a year to assess the quality of our products and services.
* Data on customer satisfaction are disseminated at all levels in this business unit on a regular basis.
See also
*
Marketing
Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emph ...
*
Marketing management
Marketing management is the organizational discipline which focuses on the practical application of marketing orientation, techniques and methods inside enterprises and organizations and on the management of a firm's marketing resources and ac ...
*
Marketing strategy
Marketing strategy allows organizations to focus limited resources on best opportunities to increase sales and achieve a competitive advantage in the market.
Strategic marketing emerged in the 1970s/80s as a distinct field of study, further buil ...
*
Production orientation
Production may refer to:
Economics and business
* Production (economics)
* Production, the act of manufacturing goods
* Production, in the outline of industrial organization, the act of making products (goods and services)
* Production as a stati ...
*
Societal marketing
Societal responsibility of
marketing is a marketing concept that holds that a company should make marketing decisions not only by considering consumers' wants, the company's requirements, but also society's long-term interests.
The societal mark ...
*
Sustainable market orientation Traditionally, market orientation (MO) focuses on microenvironment and the functional management of an organisation. However, contemporary organisations have widened their focus to incorporate more roles, functions and emphasis on the macro environ ...
References
{{Reflist
Customer experience
Market (economics)
Market intelligence