The Extent the Organization Is Market Orientated - Assignment Example

With reference to an organization you are familiar with, discuss to what extent the organization is market orientated Introduction The market orientation of organizations is studied here especially with regard to Virgin and shows the extent to which Virgin is market oriented. The market orientated companies could be compared against the not so market orientated companies and the differences between these companies are highlighted. Thus, some of the issues that will be discussed here would include a description of how market orientated organizations work and function using the triangle model of Narver and Slater (1990) that would be used to understand the different aspects of customer orientation, competitor orientation and inter functional coordination that apply to market oriented organizations. Market orientation and organizational performance are linked and a critical evaluation is provided for firms which are not market oriented such as M&S yet perform well and recommendations are provided for firms which don't perform well. The importance and characteristics of market orientation are studied along with the barriers to market orientation, how to overcome these barriers, the importance of change management and policies in human resource management, the attributes of internal marketing, quality systems and customer relationship management. The theories and applications of market orientation are also studied using examples of the large companies such as Virgin and M&S. Market Orientation Studies - Virgin Adoption of market orientation could motivate companies to provide better service provisions and quality and Green et al (2007) argued that within an organization, customer care is primarily important and marketing orientation helps in understanding the needs of customers. By satisfactorily identifying customer needs, organizations could provide quality services that would highlight the positive links between market orientation and service quality. In another related study, Racela et al (2007) show the market orientation in international business relationships with emphasis on cooperation, dependence and relationship distance between organizations or individuals. A survey of Thai exporting firms was done considering business units and Thai export firms. The results obtained from more than 200 firms show that export market orientation of companies enhances cooperation between exporters and distributors and export performance is higher with greater export cooperation and lower relationship distance. The influence of exporter dependence on export performance tends to vary among industry groups. Market orientation is thus essential to the development of business to business relationships that enhances export performance and shows how exporters could manage their relationships to achieve better performance. Marketing orientation is thus helpful in developing cooperative efforts and Racela et al (2007) recommended that overseas distributors develop cooperative norms for marketing decisions and actions and also establish some form of mutual dependence for superior performance enhancement. The relationships between market orientation, export performance and behavioral aspects of business relationships are investigated and the paper suggests that market orientation practices help in enhancing cross cultural relationships. A multilayered model of market oriented organizational culture tends to distinguish between market oriented values and norms. The different aspects of market oriented culture within organizations can affect attitudes and behaviors of the sales force and market orientation values can have a substantial impact on role conflict, role ambiguity, job satisfaction and organizational commitment of such employees (Farrell, 2005). However market oriented norms do not substantially affect customer orientation of salespersons. Considering these background studies, we can analyze whether a specific chosen company has adequate market orientation, if so what are its policies and attributes and what are the barriers faced by the company and the quality systems used to enhance its relationship marketing needs The company chosen here is Virgin and the company's policies and procedures towards market orientation would be considered along with a look at the markets in which it operates. The importance of human resource management and relationship marketing are highlighted along with the use of quality systems and customer and competitor orientations are also equally important. An analysis of Virgin's market orientation policies would bring out several issues related to customer orientations and relationship marketing, especially in accordance with the basic model used in the discussion here, the Narver and Salter (1990) model that shows the relationship between market orientation, business profitability and competitive advantage. The concept of market orientation has in fact been developed by Narver and Slater (1990) and their model provides a cultural perspective on market orientation. Market orientation has been defined as "the organization culture that most effectively and efficiently creates the necessary behaviors for the creation of superior value for buyers and, thus, continuous superior performance for the business" (p. 21). According to Narver and Slater, there are three behavioral components to market orientation and these would be customer orientation, competitor orientation, and interfunctional coordination. Innovation is an important part of market orientation that could also help in maintaining long term focus and profitability for the company. The Virgin group of companies represents several avenues such as travel and tourism, leisure and pleasure, shopping, social environment, media and telecommunications, finance and health. There have been several telecommunications and marketing initiatives taken up by the company that suggests how Virgin's orientation policies could have a positive impact on its business performance and profitability. For example Virgin Media which runs the Virgin Mobile operation launched a 20m marketing blitz and aired promotions recently. The marketing orientation of Virgin is focused on building differentiation and loyalty of customers. Customers are given more choices and even the company stays flexible with customer needs. With increased choices, customers and companies also tend to build satisfaction and loyalty over time. In case Virgin Atlantic, 95% customers said that they received good or excellent service and 96% said that they would fly Virgin Atlantic again and 95% would recommend Virgin to others. Among the staff, 86% of the staff felt very proud about working for Virgin and the market orientation of the company is also reflected in the ideals followed by the company staff members. A Virgin person tends to listen to the customers, stays calm even under pressure, and has passion for new ideas. The culture that is common within all Virgin businesses highlights the fact that the Virgin brand can have equally effective marketing strategies across its industries in the diverse areas of transportation, music, biotech, media and telecom. Virgin stands for a global brand name for 200 companies worldwide with 35,000 people and revenues exceeding 4 billion. According to the company, to the customers, Virgin would represent 'value for money, quality, innovation, fun and a sense of competitive challenge' and the market orientation is focused on providing quality service. The group shows keen interest in empowering its employees and also emphasizes on understanding customer needs and tries to improve customer experience through innovation and continuous feedback. Any new venture or innovation within the company is based on research and analysis and the industry is reviewed to answer several questions on market structure. Some of the questions that the company seems to ask are - Is this an opportunity for restructuring a market and creating competitive advantage (virgin.com, 2007) What are the competitors doing Is the customer confused or badly served Is this an opportunity for building the Virgin brand Can we add value Will it interact with our other businesses Is there an appropriate trade-off between risk and reward (virgin.com, 2007) The questions posed by the company suggest that the company wishes to enter into the market by focusing on creating competitive advantage and customer value. The company strategies also emphasize on the need to restructure the market, build brand value and serve customer expectations. Adding value to their services and the brand would help in developing not just an image in the market but also create a significant competitive advantage. Narver and Slater's (1990) model on customer orientation, competitor orientation and inter functional coordination could be applied to Virgin's marketing strategy in which there is an emphasis to understand customer needs and competitor objectives. Virgin's competitors could be many in different areas such as T Mobile and Orange in telecom, British Airways in travel, and HMV and others that compete with Virgin Mega store. Virgin has a specific focus on its competitors as this helps the company to develop innovative products and maintain a competitive advantage. In fact the introduction of Virgin trains in Britain and innovative concepts such as Virgin Spa and Virgin vacations and balloon flights has made the company popular for completely new ideas. Considering the extent of its business and establishment of over 200 companies not only in Britain but world wide, Virgin seems to have developed a global presence and has been made stronger with the development of its brand name and image. The brand, values and attitudes of the people in Virgin seem to distinguish it from other companies and the company uses the best of market skills, knowledge and management style to set up its joint ventures and partnerships. N many cases, Virgin operates in under served or inadequate markets where the customer is not served well and with its strong brand presence, the company enters into these markets to fulfill customer needs. Picking the 'right market and the right opportunity' (virgin.com, 2007) is the main success tool of the company and shows the market orientation features of the company. Some of the brand values followed by the company are: Value for Money, Good Quality Product and Service, Brilliant Customer Service, Innovative products and Orientation, Competitively Challenging and Fun. Conclusion: The brand values as highlighted by the company show that market orientation used by the company is primarily dependent on facing and challenging competition and competitors, using innovation and innovative products as a tool for market orientation, using good quality product and customer service to help improve market orientation and understanding customer needs and expectations to provide value for money. Some barriers to market orientation could be political and social resistance offered by some regions and countries that would resist the entry of the Virgin group. Some other barriers could be competition from rivals, legal problems with other companies and local groups and customer preferences for already existing markets. Shrewd marketing and public relations could however overcome these barriers for the company and developing useful interaction with other companies and obtaining feedback from customers would be essential party of the market orientation process. One very important characteristic of Virgin is its focus on change and innovation. This is extremely important as the company maintains its pace with the changing world by updating technology and communication features and brings constant innovation to its products and services. A very modern approach to business is what distinguishes Virgin and maintains customer loyalty. Thus the Virgin group of companies is completely market orientated in its approach and maintains a strong global presence through the strength of its brand name, customer orientation, competitive advantages, innovative products and marketing strategies. Bibliography Childerhouse, Paul;Towill, Denis R. (2006) Enabling seamless market-orientated supply chains International Journal of Logistics Systems and Management, Volume 2,Number 4, pp. 357-370(14) Farrell, Mark (2005) The effect of a market-oriented organisational culture on sales-force behaviour and attitudes Journal of Strategic Marketing, Volume 13,Number 4, pp. 261-273(13) Green, Kenneth W.;Chakrabarty, Subrata;Whitten, Dwayne (2007) Organisational culture of customer care: market orientation and service quality International Journal of Services and Standards, Volume 3,Number 2, pp. 137-153(17) Golann, Bret (2006) Achieving Growth and Responsiveness: Process Management and Market Orientation in Small Firms Journal of Small Business Management, Volume 44,Number 3, pp. 369-385(17) Keskin, Halit (2006) Market orientation, learning orientation, and innovation capabilities in SMEs: An extended model European Journal of Innovation Management, Volume 9,Number 4, pp. 396-417(22) Madariaga, J.;Valor, C. (2007) Stakeholders Management Systems: Empirical Insights from Relationship Marketing and Market Orientation Perspectives Journal of Business Ethics, Volume 71,Number 4, pp. 425-439(15) Narver John C., Slater Stanley F. (1990) The Effect of a Market Orientation on Business Profitability Journal of Marketing, Vol. 54, No. 4 pp. 20-35 Racela, Olimpia C.;Chaikittisilpa, Chawit;Thoumrungroje, Amonrat (2007) Market orientation, international business relationships and perceived export performance International Marketing Review, Volume 24,Number 2, pp. 144-163(20) Tajeddini, Kayhan;Trueman, Myfanwy;Larsen, Gretchen (2006) Examining the Effect of Market Orientation on Innovativeness Journal of Marketing Management, Volume 22, Numbers 5-6, pp. 529-551(23) Websites www.virgin.com, accessed 2007-04-21 Read More