Importance of Market Orientation - Coursework Example

Running Head: Marketing Orientation Market Orientation Your name Course name Instructor’s name Date of submission Introduction Researchers have continuously asserted that market orientation is a very significant approach towards achieving better organizational performance. Market orientation is defined as a firm’s wide generational propagation and its responsiveness towards market intelligence. Market orientation is involved in allowing wants or needs of customers in driving various organizational strategic decisions. It is evident that organizational culture is committed towards establishing a strong customer value. Market orientation is also known as consumer focus or marketing concept (Peruvemba, 2002). This approach comprises of several components namely customer and competitors’ orientation whereby each component connect widely to organizational performance. This study will mainly focus on understanding what market orientation, its importance within organizational performance, analyze an Australian company determining how market orientation is integrated in this organization and finally recommendation based on how the company can be made more market oriented. The construct of market orientation is one which is centralized in marketing field since it acts as the cornerstone of marketing field. Research further indicates market orientation is widely connected to firm’s profitability, proper customer services, retention, sales growth, launching of new products, employee satisfaction and growth in sales revenues. From these descriptions it is clear to say that market orientation rest upon three main pillars mainly profitability, coordinating marketing and customer focus. An organizational capability in establishing a positive orientation based on its three pillars widely depends on its internal culture and structure (Peruvemba, 2002). Types of orientation Literature review The concept related to market orientation was developed between late 60s and early 70s at Harvard University focusing on improving companies’ profitability margin. This approach replaced what was known as sale orientation which was more prevalent in the mid 50s and production orientation which was mainly predominant prior in mid 50s. Sale orientation was done away with due to the fact that it show little concern on the general marketing function whereas production orientation brought the idea customers wanted something which was of more quality or one that is unique. It is very essential to clearly understand the three pillars of market orientation since they form the basis of finding out what importance is linked to marketing orientation (Clark, 2000). Pillars of market orientation Customer focus Traditionally, most organizations greatly emphasize on either market share or profitability as they main guiding orientations. The major responsibility of any organization is mainly focused on increasing shareholder values. With increased globalization, competitions and branded goods companies have been focused to strategize on customer focus (Liu, 2003). These factors are forcing major international and local companies to shift on this orientation so as to meet customer satisfaction from one which is of profitability growth, customer to products. Customer centricity is one major concern towards a positive customer focus thus creating future strong organizational strategies. Coordinated marketing For any organization to have a perfect market orientation, it has to narrowly confines tactical 4P framework so as to transform wider discipline within your company. Simply, for a company should be focused in coordinating cross disciplinary function. For this discipline there is need for a broader responsibility it widely quantitatively measure of market orientation outcome. It is evident that measurement of coordination in marketing orientation poses greater challenge for more marketers (Martin, 2003). Marketer through the use of marketing orientation has currently refused to acknowledge that consumers are not the solely responsible for organizational profitability. These factors installed in a company market orientation become coordinating activities that widely involves organizational departments such as operations, human resource and finance. Profitability In today’s global world, future potentiality of an organization depends widely on market orientation that involves attractiveness which is highly involves capital markets. Researches indicate that most top officials within organizations are required to perform certain financial strength as part to improve on their profitability. Most companies fail to understand the value of profitability and its impact on long term strategic plans (Martin, 2003). Within the framework defined by market orientation profitability mainly encompasses on both predesigned financial and non financial measures. Comprehensive measures linked to market orientation allow organization to balance between both short and long profitability strengths keeping in mind about financial health been displayed in this particular company. Clearly, these three pillars of market orientation have widely allowed GM Company to come up with a strong philosophy which in turn has provided it with long term strategic goals. By way of following tougher traditional measures, General Motors’ (GM) Company has ensured that its market orientation is effective and one which is reliable towards future growth. The coming up with a structural market orientation, GM company has greater chances of inculcate new ideas which are essential in channeling profitability thus a stronger future (Lane, 2002). Importance of market orientation Within GM Company, marketing orientation is surrounded by certain strategic decisions that shape up company target market which mainly comprises of potential customers. Their company is widely using market orientation in valuing all consumer wants for their satisfaction. Further, this contributes to the company transformation where is able to create a long lasting organizational business culture. Market orientation within this company is widely focused on identifying and performing a thorough research on their potential customers needs. These researches are very essential in the sense that the company is able to understand what requirements are needed in a product or a service so as to maximize on customer satisfaction. It is evident that customer satisfaction is mainly focused at creating awareness on companies’ services and goods so as to facilitate a more competitive advantage. Further, General Motors company focus on characterizing all business attributes as part of defining their target market and establishing a strong customer relationship. Through extensive use of its various researches, the company have been able establish newer and broader products, highlighting product values and their respective benefits, increase in innovation methods and finally designing of stipulated customer benefits such like on time delivery, warranty and proper organization installation. All the described importance in this paragraph are normally geared toward customer satisfaction or advantage. The chart below defines importance of marketing orientation in relation to: Coming up with a superior customer value, the company ensures that its maket orientation does not only focus on customer but rather on how it can understand its competitors so as to perfect on their services and products. Superior values mainly requires understanding its strenthgs and weaknesses to increse its strategical future capability (Chow, 2003). As part to ensure effectiveness companies have developed market oriented structures which focuses on establishes on strong building value especially on its new products. Market orientation in this company widely influences its innovativeness and its performances. Application of Marketing Orientation at the General Motors General Motors (GM) applies marketing orientation using five key concepts. To begin with, GM applies the production concet as it develops products that will be usefukl for coonsumers not only for that moment but als oin the future. The motor cars that are produced by the company are not only durable but efficient (Cadogan, 2000). The company produces motor vehicles that are of low costs, efficient and distributes them widely in the market. the firm has assembly plants in different regions of the world where it assembles and sells their products. This is able to decrease their production costs. The motor vehicle designs are develop to meet different needs and costs. The prices of their products are based on the region and the needs of the consumers. Secondly,the firm utilizes the product concept in its market orientation. The products produced by the firm are of immense quality as they are able to last for a longer time compared to the other products from different motor making firms. The firm has a range of designer personnel that are vested with the responsibility of designing vehicles that of superior design thus be able to attract the consumers eye (Cadogan, 2000). The ranges of products produced by the firm meet great performance and range depending on the consumer needs. The cars range from small cars to big SUVs and trucks. The firm ensures that I does appropriate research in to the design and needs of the consumers before delivering a product tha tis expected to perform well in the world dominated by new innovative ideas. Thirdly, the firm applies the selling concept in marketing orientation. Pricing and marketing highly depend on how the customers will react to the psices that the company sets on their products. However, when it comes to purchasing of cars price matters as the higher the price the more value you get for the commodity (Steinman, 2000). In this case, the firm has a wide range of products at different prices but not compromising with the quality of the products especially the safety components. The firm places high emphasis on value that corresponds highly with the commodity and the needs of the consumer. The firm practises skimming while introducing new products to the market. the firm conducts awareness on the products that are to be introduced into the market through televiosions, posters, social networks, internet websites and billboards (Norton, 2009). In addition to this strategies, the firm employs the OpWin business approach that differs from the other busness models by making exploits on the planned and unplanned innovations. It eexploits this approach by providing new products that are of value to the market and servicing ideas that are not of value to the already existing market. the firm also aims at searching for marketing opportunities for innovations that are not expected. The business strategy is considered as enterpreneurial. The strategy is also valuable in the identification on ways that the resources of the firm will be utilized and be able to sustain monetary wealth creation. The approach aims at exploiting in to new markets (Steinman, 2000). The firm does this by the creation of partnerships with other car manufacturing companies and in building assembling firms in countries that have not ben penetrated that is aimed atdecreasing production costs and minimizing importation costs which in turn reduce the price on the manufacture automobiles. The main purpose that has driven the GMcompany is the producton of automobile tha tcan be affordable and does not compromise on the quality (Kotelnikov, 2011) . The placement of a particularly high price on the cars by GM shows that are of superior and in a class of its own. The firm engages in massive longtime advertisement to enable the productions stay competitive in the dynamic market. Among the commonly used promotion method is the road show. The company makes deliberate attempts to participate in the organized auto shows that are organized worldwide. This to them is the best and appropriate forum to meet potential and competent trade dealers and distributors. The firm also promotes its products in magazines like the High-Tech performance, Automobile, Motor trend, Auto Express and Super Chevy among others that consist of in-depth analysis of their products. The brand marketing of the products by the firm as being engineered and designed like no other makes them gain an upper advantage over the other cars of the same make. The strategy was able to knock off fellow product competitors in the market in the earlier years of the 21st century (Norton, 2009). The firm invested in the building of cars that were to gain major dividends down the competitive consumer market road. The main concept that the firm recognizes is the setting up of the right pricing for a commodity in the market. The quality of the products made by the firm defines the characteristics of the brand as of being superior to the others. Through this, the company was able to sell 14.7 million cars worldwide a number record three times higher than their closest rivals Dailmer which sold a low of 4.7 million cars worldwide (Norton, 2009). On the other hand, the firm leans on the fact that the consumer market needs cars that are luxurious. The larger part of the USA prefers having not only an SUV but one that is also luxurious. To respond to this demand, the firm introduced cars in to the market that have full usage of the electronic technology. The firm introduced new models and charged low premium prices on them. The firm has used the high level of finances to acquire new companies with the aim of increasing their capacity in production and meet the growing needs of the consumer markets. Among the new companies that were acquired included Daewoo, Suzuki and Wuling. In addition, the firm has reduced their production costs through the use of automation and lithe manufacturing (Kotelnikov, 2011) . The firms acquired are based in Africa, Europe and Asia regions where some are used for assembly and servicing whereas others are used for the manufacturing of the products. In response to the global warming menace, the firm has set to develop cars that use recyclable and environment friendly energy. This has been achieved through the production of new models that are able to run on solar energy that have been test driven and delivered good results. The firm rides on its slogan as being the world leader in road through continuous improvement that is driven by integrity, innovation and teamwork (Norton, 2009). In addition to this, the firm meets the safety needs of not only consumers but of other road users by participating in the Buckle up program which is a national program in the USA that is aimed at promoting safe road usage for the American children. This enables it to be identified as a company that cares for both the motorists and pedestrians and rides on providing products that are of quality. The program aims at educating all the motorists on the safe usage of the motor vehicles and the safety of the public and other road users. The firm also conducts surveys to determine the consumers’ attitude towards their products. The survey is geared at identifying the consumers’ awareness of their products, trust, relevance of the products, and quality of the products, best service production and their value (Norton, 2009). In addition to the above, the company introduced the Employee discount for everyone which resulted to the sky rocketing of their products to reach records high. As much as the strategy having the detrimental effect on the branch, the firm was able to attain great profits on their products. The firm used this strategy from the 20th of August 2008. This was in response to the wishes of the customers that their products of having high prices. This strategy allows the consumers to be able to purchase the products at the same rate as the one the company issues to its employees (Kotelnikov, 2011). In conclusion, market orientation is essential for the survival of any business in the dynamic product market. It involves the application of the concepts of marketing. The firms that is able to survive the product market tides are those which is just consumer led but one which is also markedly oriented. Market orientation requires the full support of the firm to be implemented fully and to be sustainable. In addition, the organizational culture plays a vital role in the implementation of marketing orientation. In market orientation, the firm should aspire not only to meet the needs of the consumers but the employees as well. The firm needs to be able to learn from the performance of their products and be keen to note any needed changes that are required to sustain their competitive advantage. The concept requires full strategic commitment from the firm as well as changes in the organization that will be aimed at attaining the formulated goals. References Peruvemba, V.(2002). “The Effects of Perceived Market and Learning Orientation on Assessed Organizational Capabilities” , Industrial Marketing Management, Vol. 31: 545-554. Clark,D. (2000). “Implementation Issues in Core Competence Strategy Making”, Strategic Change, Vol. 9: 115- 127. Liu, S. (2003), “Market-oriented organizations in an emerging economy: A study of missing links”, Journal of Business Research, Vol.56: 481-491. Martin, J. (2003). “Using Supply Chain Management to Leverage a Firm’s Market Orientation”, Industrial Marketing Management, Vol. 32: 25-38. Lane, N. (2002). “Market Orientation and Retail Operative’s Expectations”, Journal of Business Research, Vol. 55: 261-273. Chow, R. (2003). “Market Orientation and Business Performance in a Chinese Business Environment”, Journal of Business Research, Vol. 56: 227-239. Steinman, C.(2000). Beyond market orientation: When customers and suppliers disagree. Journal of the academy of Marketing Science 28, 109-119. Cadogan, J. (2000). The interaction between market orientation, industry environment and business success: evidence from an exporting context. Australasian marketing journal 8, 55-67. Kotelnikov, V. (2011) The way of winning the com-petition battle and creating economic value for your stakeholders. Viewed on the 28th 2011 from: http://www.1000ventures.com/business_guide/business_model.htm Norton, M. (2009) General Motors Business Strategy Viewed on the 28th of April 2011 from; http://myweb.wit.edu/nortonm/coursework/GM_Business_Plan.pdf Read More