Understanding Market Orientation

1
Understanding Market Orientation

• What is Marketing?
• What is Market-Driven?

2
What is marketing?

• Gathering, monitoring, analyzing information
• Environment
• Customers
• Competitors
• Interacting with all areas of organization,
  sharing information
• Developing, implementing, and controlling
  strategic marketing plan, based on information
• Creating satisfying exchanges

3
External environment
Internal environment
Marketing Sales
Competition
R D
Consultants Advisors
Consumers
Marketing Manager
Other internal information sources
Other Organizations
Retailers Wholesalers
Finance Accounting
Other Publics
Production
Suppliers
4
What is Market Orientation?

• Superior ability to understand, attract, and keep
  valuable customers.

Externally oriented culture
Capabilities in market sensing, market relating,
and anticipatory strategic thinking
Adaptable and coherent organizational
configuration of culture, capabilities,
and processes
5
Elements of Market Orientation
Competitors
Customers
Culture is externally oriented
Superior Ability to Understand, Attract, and Keep
Valuable Customers
Configuration Focus on superior customer
value Coherence of structure
systems Adaptability
Shared Knowledge Base
Capabilities Market sensing Market
relating Strategic thinking
Channels
Collaborators
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Advantages of Market Orientation

Customer Satisfaction Retention
Market-Based Strategy
Market Orientation
7
Why does market orientation lead to greater
profits?

• Cost and investment efficiency
• Employee satisfaction
• Price premium
• Revenue growth
• Competitive preemption

8
But.

• Have to be truly market driven!!

Superior ability to understand markets Sense
emerging opportunities Anticipate competitors
moves Make fact-based decisions
Superior ability to attract and keep customers
Deliver superior value Encourage loyalty
Leverage market investments
9
Impediments to Being Market Driven

• Being oblivious to market
• Becoming compelled by the market
• Feeling superior to the market

10
Market Driven Culture
Market-Driven Organization
Self-Centered Organization

• All decision start with the customer and
  opportunities for advantage
• Quality is defined by customers
• The best ideas come from living with customers
• Employees are customer advocates
• Customer knowledge is a valuable asset and
  channels are value adding partners
• Customer loyalty is key to profitability

• Well sell to whoever will buy
• Quality is conformance to internal standards
• Customers dont know what they want
• Customer relations are problems for the marketing
  dept
• Customer data are a control mechanism and
  channels are conduits
• New accounts (conquests) are what matters

11
Market Driven Culture
Market-Driven Organization
Self-Centered Organization

• No sacred cowscannibalize yourself
• Learn from mistakes
• Market research is decision insurance
• Paranoia about competitors is healthy
• The behavior of competitors can be anticipated
  and influenced
• We know more than the competitors

• Protect the existing revenue stream
• Avoid mistakes
• Market research is a justification tool
• We can live with our competitors
• Competitors are unpredictable
• If competition does it, it must be good

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Culture Dimensions

• Flexibility/spontaneity vs. control, order
  stability
• Internal maintenance vs. external positioning