What is Market Orientation?

This strategy suggests that businesses shall observe the requirements and needs of the customer, and based on those demands, they shall design and sell their products and services.

Characteristics

The Following are characteristics of market orientation.

#1 – Customer-Oriented

The strategy is based on the demands and requirements of the customer and advises that enterprises shall, to be profitable, turn their focus on customer preferences. The enterprises that follow this strategy deploy their resources to fulfill customer needs.

#2 – Realizes Competition

This strategy also realizes that it is vital to identify competition and threats to the business, apart from identifying customer needs. A business that cannot identify potential threats may incur damage in the future.

#3 – Product Development

The enterprises which follow this strategy are involved in product innovation and development to enable themselves to meet the changing needs of customers.

#4 – Functional Coordination

In an enterprise that follows the strategy, the different functional departments tend to coordinate with each other for the excellent quality of goods and services.

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How Does it Work?

Market orientation is a business marketing strategy that focuses on its customer base to design and sell products and services. The strategy involves analyzing and researching the customers’ requirements, concerns, and suggestions concerning the particular product or service the enterprise deals with. This way, the enterprise will be aware of the trends in customer preferences. It will enable the company to modify or design its product or services according to customer preferences.

Example of Market Orientation

Let us take an example of an automobile manufacturing unit that produces cars. It might be producing different models and categories of cars. However, if it follows market orientation, it will conduct research as to the models demanded by the customers and the features they look for in the cars!

Stages of Market Orientation

Market Orientation vs. Product Orientation

Market orientation is a strategy that focuses on customer preferences and requirements. It suggests that the company should focus its design and sale of products based on the requirements and demands of the customers to be profitable.

  • Initiation It is the first stage, wherein the enterprises identify the potential threats that may affect them. Along with threats, they also research what steps can be taken to handle those threats. Reconstitution In the next phase, the enterprise employees are presented with the plans that are identified in the initiation stage, which are required to be followed. Enterprise needs to ensure that all the employees are ready for the change, and those who are not prepared will be required to leave the enterprise. Institutionalization The plan is put to action at this stage. It is a crucial stage, and many training sessions are held for employees so that the enterprise can now cater to customer needs. Thus, the execution of the plan is done under this stage. Maintenance It is the final stage. The enterprise continues to meet customer demands and requirements, as suggested in the initial plan. It is ensured that the plan remains effective and is being followed by everyone properly.

It is the first stage, wherein the enterprises identify the potential threats that may affect them. Along with threats, they also research what steps can be taken to handle those threats.

In the next phase, the enterprise employees are presented with the plans that are identified in the initiation stage, which are required to be followed. Enterprise needs to ensure that all the employees are ready for the change, and those who are not prepared will be required to leave the enterprise.

The plan is put to action at this stage. It is a crucial stage, and many training sessions are held for employees so that the enterprise can now cater to customer needs. Thus, the execution of the plan is done under this stage.

It is the final stage. The enterprise continues to meet customer demands and requirements, as suggested in the initial plan. It is ensured that the plan remains effective and is being followed by everyone properly.

On the other hand, the product orientation strategy focuses on improving the quality of the regularly made product. It does not associate itself with the customers’ requirements, instead of focusing on how it can improve its product.

Advantages

Companies that follow market orientation enjoy various benefits.

  • Increase in the overall revenueRevenueRevenue is the amount of money that a business can earn in its normal course of business by selling its goods and services. In the case of the federal government, it refers to the total amount of income generated from taxes, which remains unfiltered from any deductions.read more.Market share increases.Customers remain associated with the company.It helps in product innovation, as updated products attract customers.It brings a good reputation for the company as the customer feels happy with its products and services.

Disadvantages

  • As customer needs keep changing, it calls for continuous changes by the company in its products and services.A large portion of the company’s budget is spent on research work.In the dynamic market conditionsDynamic Market ConditionsMarket Dynamics is defined as the forces of market constituents responsible for the shift in the demand and supply curve and are therefore accountable for creating and reducing the demand and supply of a particular product.read more, it is difficult to predict what the future could be concerning customer preferences, and thus, it requires lots of planning.

Conclusion

Market orientation is based on customer needs and preferences. This strategy, combined with other business strategies, may become very useful for the companies.

This article has been a guide. What market orientation is and its definition. Here we discuss an example of market orientation and its types, characteristics, and differences. You can learn more from the following articles –

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