Change is recognised as endemic and adaption considered to be the Darwinian
condition for survival. Changing needs present potential market opportunities
which drive the company. +
( Jobber. D. 1995. Page 7.)
Marketers have recognised that marketing is a human activity, which facilitates the aim, of satisfying the needs and wants of consumers through an exchange process. The market concept then consists of recognising and creating consumers' needs and wants , which then creates a potential market opportunity, which consequently aims to satisfy this need. Market orientation, however, takes a broader view, McNamara defines it as :
a philosophy of business management, based upon a company-wide acceptance of the need
for customer orientation, profit orientation, and recognition of the important roles of marketing in communicating the needs of the market to all major corporate departments. +
(as quoted in Kohli.A.K. & Jaworski. B.J.1990.page 3.)
Consequently, market orientation is seen to mean 'the implementation of the marketing concept'.
A brief outline of market orientation.
Kotler (1994) discusses four business philosophies or orientations toward the marketplace. The production concept states that consumers will purchase those products which are available in the greatest quantity and at the lowest cost to them. Little product differentiation is apparent at this stage. The product concept states that consumers will favour goods that are superior to others in quality or features. The selling concept shifts the emphasis from the product to aggressive selling and promotions. Closing the sale is the goal of this orientation. The selling concept is often characterised by an increase in the size of the sales force Finally, the marketing concept eschews the notion that the most important element in business philosophy is either the production capability or capacity or aggressive sales. Instead, this concept focuses on the needs and wants, both present and future, of potential customers. Kotler offers further clarification: selling focuses on the needs of the seller; marketing on the needs of the buyer.
Kohli and Jaworski (1990) recognise three actionable elements of the marketing concept: (a) intelligence generation; (b) intelligence dissemination; and (c) responsiveness. Intelligence generation consists of demand assessment, examination of external factors, competitors, and customer needs. This phase also includes co-ordination of the data gathered. Intelligence dissemination involves sharing the data secured in the generation phase. In this process, both formal and informal communication are desirable as is accessibility.
Responsiveness to the market intelligence gathered and disseminated is perhaps the most crucial step of the process in moving towards a marketing concept. In some ways, it may be a simpler activity to collect and share information than it is to act upon it. Responsiveness is probably the most important aspect in a corporation's drive to become a marketing-oriented firm. In this phase, the business (a) selects the target markets; (b) designs new products or changes existing ones in response to customer input;
(c) anticipates future customers needs; and (d) distributes and promotes products that elicit a favourable action on the part of the consumer. Therefore,
the organisational 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 and Slater further reinforced this theory. They believed that the organisational culture would most effectively create the behaviours needed to create superior value for buyers, consequently ensuring superior performance for a business. They conceptualised a 'genuine behaviourally-based model of a market orientation as a mixture of customer and competitor orientations coupled with functional integration.'
Narver and Slater's (1990) model of the dimensions of market orientation
Why do organisations adopt a market orientation ?
Market orientation is adopted by organisations in order for them to achieve and secure a higher business
operation. This being that a competitive advantage is attained, through the successful responding and anticipation of customer needs, subsequently resulting in a lucrative business performance.
.... customer satisfaction, [positive] word of mouth, repeat business is enhanced. Customer
retention is better for us, [it is] much less expensive. +
(As quoted in Kohli.A.K. & Jaworski. B.J.1990.page 13)
The common goal of creating customer satisfaction leads to a sense of belonging resulting in commitment to an organisation. Customer satisfaction will lead to managerial and employee contentedness resulting in a motivated company working in a unified manner.
The greater the market orientation, the greater the (1) esprit de corps, (2) job satisfaction, and
(3) organisational commitment of employees. +
(As quoted in Kohli.A.K. & Jaworski. B.J.1990.page 13)
The key components of marketing orientation.
The key component of market orientation is the structure of the company. First, top management play a critical role in defining a corporations values and orientation. Top management emphasis of market orientation seeks to encourage employees in organisations to be aware of the ever-changing markets, to communicate market intelligence amongst each other, and react accordingly. Additionally, management must be seen as willing to take risks, with the introduction of new products and services in response to customers' needs, thus making employees more likely to respond to changes.
Interdepartmental connectedness, as opposed to conflict, is regarded as fundamental in creating a sound organisational environment which will work towards optimal market orientation. Lastly, organisational structure and systems is an essential factor in attaining an effective market orientation. As Stampfl argues in Jaworski and Kohli's 1993 paper, 'it appears that formalisation and centralisation are inversely related to an organisation's responsiveness'.