Understanding Market Orientation What is Marketing? What is Market-Driven?

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

External environment Internal environment Marketing Manager Marketing & Sales R & D Other internal information sources Finance & Accounting Production Consultants & Advisors Competition Consumers Other Organizations Other Publics Suppliers Retailers & Wholesalers

What is Market Orientation? n 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

Elements of Market Orientation Shared Knowledge Base Configuration Focus on superior customer value Coherence of structure & systems Adaptability Culture is externally oriented Capabilities Market sensing Market relating Strategic thinking Superior Ability to Understand, Attract, and Keep Valuable Customers Competitors Channels Collaborators

Advantages of Market Orientation Market Orientation Market-Based Strategy Customer Satisfaction & Retention $

Why does market orientation lead to greater profits? n Cost and investment efficiency n Employee satisfaction n Price premium n Revenue growth n Competitive preemption

But…. nHnHave 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

Impediments to Being Market Driven n Being oblivious to market n Becoming compelled by the market n Feeling superior to the market

Market Driven Culture n All decision start with the customer and opportunities for advantage n Quality is defined by customers n The best ideas come from living with customers n Employees are customer advocates n Customer knowledge is a valuable asset and channels are value adding partners n Customer loyalty is key to profitability n We’ll sell to whoever will buy n Quality is conformance to internal standards n Customers don’t know what they want n Customer relations are problems for the marketing dept n Customer data are a control mechanism and channels are conduits n New accounts (conquests) are what matters Market-Driven Organization Self-Centered Organization

Market Driven Culture n No sacred cows—cannibalize yourself n Learn from mistakes n Market research is decision insurance n Paranoia about competitors is healthy n The behavior of competitors can be anticipated and influenced n We know more than the competitors n Protect the existing revenue stream n Avoid mistakes n Market research is a justification tool n We can live with our competitors n Competitors are unpredictable n If competition does it, it must be good Market-Driven OrganizationSelf-Centered Organization

Culture Dimensions n Flexibility/spontaneity vs. control, order stability n Internal maintenance vs. external positioning