MARKETING MANAGEMENT

Marketing Management



Marketing Management

What is a market orientation?

Market orientation as an organizational pattern of firms came up, following Drucker's (1954) argument that creating a satisfied customer is the only valid definition of business purpose. Market orientation places as its first objective to uncover and satisfy customer needs at a profit. Market-oriented perspective, and it was soon widely adopted. Market orientation implies that one sees the total market not as a homogenous mass market but as market segments of consumers. Segmentation started with the notion of socio-demographic division with variables such as age, sex, and income. This resulted in a limited number of focused product variants. Later, segmentation became more refined. More subtly defined niches based on lifestyles and previous buying behavior resulted in an increasing number of product variants to care for individual, specific needs. Market segmentation demands information on consumers' needs. Today's instruments of market research were created as tools to satisfy exactly this set of demands by applying better understanding with information about customers(John, 1993).

To achieve superior performance, a business must develop and sustain competitive advantage. But where competitive advantage was once based on structural characteristics such as market power, economies of scale, or a broad product line, the emphasis today has shifted to capabilities that enable a business to consistently deliver superior value to its customers. This, after all, is the meaning of competitive advantage. Our recent research shows that a market-oriented culture provides a solid foundation for these value-creating capabilities. With a continuous refinement of segmentation, market segmentation was replaced by the notion of customer orientation . Its principal features are (a) a set of beliefs that puts the customer's interest first; (b) the ability of the organization to generate, disseminate, and use superior information about customers and competitors; and (c) the coordinated application of interfunctional resources to the creation of superior customer value. Especially the strong emphasis on providing “customer value” in all functions of the organization can be regarded as the differentiation of customer orientation to the previous stage of market orientation(Day, 1994).

A business is market-oriented when its culture is systematically and entirely committed to the continuous creation of superior customer value. Specifically, this entails collecting and coordinating information on customers, competitors, and other significant market influencers (such as regulators and suppliers) to use in building that value. The customer came closer into the focus of the firm. During this time, the notion of the marketing function as the central entity to deal with and think about a firm's customers developed. Relationship management reinforced this perspective. It “emphasizes understanding and satisfying the needs, wants, and resources of individual consumers and customers rather than those of mass markets and mass segments”. Instead of segments of customers, individual customers were seen as the target of the marketing mix, resulting in the term “one-to-one marketing”. The members of one market segment are now no longer regarded as being heterogeneous in relation to their profit contribution for the firm, but each customer is assessed ...