Market Orientation and Market Oriented Firms - Essay Example

Marketing orientation provides organizations with the opportunities to engage in activities aligned toward developing an understanding of customers’ needs and future expectations; these activities also assist in understanding the factors that could affect customers’ needs. Different departments within the organizations are completely oriented toward identifying and designing methods to meet these changing customer demands.

According to Naver and Slater (1990), organizations that follow marketing orientation tend to follow five key strategies namely customer orientation, competitor orientation, inter-functional-coordination, organizational culture, and focus on long-term profits. The most well-known market-oriented organizations are Sony, Dell, Toyota, General Electric, etc (Day, 1999). These organizations are customer-focused and use marketing information to develop strategies that enhance customer satisfaction.

Several benefits have been identified with market orientation. A market-oriented firm can focus on and retain its loyal customers that are of more value to the firm’s business. These firms usually have higher employee satisfaction because of greater customer satisfaction and vice versa. This further enhances employee commitment and productivity. Employee turnover, employee recruitment, and selection, and training costs are relatively lower. Instances of low operational efficiency and productivity are relatively very few. Market orientation creates a greater value proposition, which in turn results in premium prices. Proactive planning and preparation for changing markets fosters innovation in the right direction, which enhances revenue and profits in successful cases. With high customer loyalty as well as employee commitment, these organizations earn a competitive advantage that cannot be replicated easily by competitors.

However, marketing-oriented firms need to spend too much money and effort on market research, which is expensive. The uncertainty of future and customer expectations could levy heavy costs on the company in case of huge changes. Moreover, operating in regulated markets makes it rigid to deal with stakeholders. Being too customer-focused can inhibit innovation, which could be an advantage for competitors. The way information related to customer needs is gathered can impact the outcomes derived. Hence, market-oriented firms need to focus on customer expectations and behavior rather than customer responses.

In conclusion, market-oriented firms focus on understanding, attracting and keeping their customers through continuous orientation as per the market change. They achieve this through customer focus, tracking competitors, fostering coordination between different departments and aligning organizational culture towards creating market niches. This focus imbibes specific advantages and disadvantages; yet, organizations need to continually strive to tackle the issues through broader planning; embracing practices that enhance innovation; focusing on creating long-term profits and reaping the advantages. Read More