“A market driven culture supports the value of thorough market intelligence and the necessity of functionally coordinated actions directed at gaining a competitive advantage.” George Day
To explore and elaborate the concept of market orientation based on scholarly research. Further to outline evaluation criteria, while highlighting major implications and guiding the practical adaptation.
Today’s discussion and research about market orientation is mainly based on scholar groundwork from the early 1990s. There are Kohli and Jaworski, who look at market orientation from a behavioral perspective and Narver and Slater, who look at it more culturally-wise.
Both ideas have been explored and evaluated by further research, such as Rueckert 1992 and Deshpande et al. 1993, who started to synthesize both propositions. Therefore, major thrusts include the following dimensions:
- Customer Orientation: Focus and culture to create superior customer value, understand and explore current and future customer needs better than competitors do.
- Competitor Focus: To constantly monitor competitor activities and further relevant changes in the external environment, that impact on the business.
- Cross-functional Collaboration: To inter-departmentally coordinate activities and widely share information across all units.
- Responsiveness: To quickly respond to relevant customer requirements, market changes and competitor moves.
- Competitive advantage: To develop market strategies for competitive advantage, such as positioning, segmentation, profitability and differentiation.
To evaluate market orientation, questionnaires and scales have been developed and tested in various scenarios, i.e. countries and industries. Based on the early research by Kohli and Jaworski 1990, Narver and Slater 1993 as well as Deshpande 1993, these scales were summarized by Deshpande 1998.
The evaluation works best by focusing on one business-unit, instead of the entire company, while indicating the extent of agreement to the following statements by means of a 5-point Likert Scale (strongly disagree – strongly agree).
- Our business objectives are driven primarily by customer satisfaction.
- We constantly monitor our level of commitment and orientation to serving customer needs.
- We freely communicate information abut our successful and unsuccessful customer experiences across all business functions.
- Our strategy for competitive advantage is based on our understanding of cusotmers’ needs.
- We measure customer satisfaction systematically and frequently.
- We have routine or regular measures of cusotmer service.
- We are more custoemr focused than our competitors.
- I believe this business exists primarily to serve customers.
- We poll end useres at least once a year to assess the quality fo our products and services.
- Data on customer satisfaction are disseminated at all levels in this business unit on a regular basis.
Deshpande R., Farley J. U. (1998) ‘Measuring Market Orientation: Generalization and Synthesis’ Journal of Market-Focused Management, Vol. 2, No. 3, pp. 213-232
Narver J. C., Slater S. F. (1990) ‘The effect of a market orientation on business profitability’ Journal of Marketing, Vol. 54, No. 4, pp. 20-36
Kohli A. K., Jaworski B. J. (1990) ‘Market Orientation: The Construct, Research Propositions, and Managerial Implications’ Journal of Marketing, Vol. 54, No. 2, pp. 1-18
Written by Benjamin Teeuwsen