An organisation also sets itself objectives, to establish its position in the market place. Some of these objectives include:
- Making a profit
- Survival- beating the competition
- Increasing sales and market share
- Providing quality goods and services
- Developing a skilled workforce
- Maintaining a good relationship with actual and potential customers and other stakeholders i.e. suppliers, shareholders and employees.
The marketing objectives listed above are similar to the marketing principles and some overlap but again all of these marketing objectives are important, but some are more important than others. I think that the most important objectives are making a profit, as I said before survival- beating competition and providing quality goods and services. It is important that the company make profits in the goods they sell because they have to make sure that they keep the stake and shareholders happy, because the stakeholders have an interest in the business and is affected by what the business does. As I have already said it is important that the company take their competition into account because they will loose customers if they don’t. It is important that a company provides quality goods and services, because again if the customers are not satisfied with the quality of the goods and service they are getting than the company will loose their customers.
Market Orientation is the organisation-wide generation of market intelligence, or information on customers’ current and future needs, dissemination of that information across departments, and organisation- wide responsiveness to it. Market orientation was originally defined as an organisation-level culture, a set of shared values and about putting the customer first in business planning. This is the main reason why market orientation is so important because it is all about putting the customers first, this is important because if a company didn’t have any customers than there would be no point of the company. They wouldn’t have any customers to sell their products to. Market orientation also involves an outward-looking perspective from a firm- that is, a focus not only on customers but also on competitors. This is another reason why market orientation is important because again a company looks onwards and looks at their competition so that they know whom their competitors are and what they can do to make sure they don’t loose their customers to them.
Another reason why Market Orientation is important is because it involves taking concrete actions in response to market intelligence. These actions relate to targeting select market segments and designing new products and programs or modifying existing ones to meet customer needs.
Market Orientation is important because it consists of three behavioural components: customer orientation, competitor orientation and inter- functional coordination, which establish the activities of market information acquisition and dissemination and the coordinated creation of customer value:
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Customer orientation is the sufficient understanding of one’s target buyers and the sufficient response to their needs, through which, other things being equal, one continuously creates superior value for the buyers. A customer orientation requires that a seller understand a buyer’s entire value chain not only as it is today but also, as it will evolve over time subject to internal and market dynamics. There are two ways a seller creates value for a buyer: by increasing benefits to the buyer relative to the buyer’s cost or by decreasing the buyer’s costs relative to the buyer’s benefits.
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Competitive Orientation is another important factor in creating superior value for buyers. To create for buyers that is greater than that created by competitors, a seller must understand the short-term strengths and weaknesses and long-term capabilities and strategies of both the key current competitors and the key potential competitors.
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Interfuntional Coordination is any point in the buyer’s value chain constitutes an opportunity for a seller to create value for a buyer firm. Therefore, any individual in any function in a seller firm can potentially contribute to the creation of value for buyers. A seller must draw on and integrated effectively, as well as adapt necessary, its entire human and other capital resources in its continuous effort to create superior value for buyers. Creating superior value for customers is the proper focus of the entire business and not merely that of a single department in it.
These are the consequences that market orientation can have on different people and organisations:
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Employees: The greater the market orientation, the grater the organisational commitment of employees. Many executives noted that a market orientation provides a number of psychological and social benefits to employees. In addition, market orientation leads to a sense of pride in belonging to a organisation in which all departments and individuals work toward the common goal of serving customers. These matters result in employees sharing a feeling of worthwhile contribution and stronger feelings of job satisfaction and commitment to the organisation.
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Environment: Market Orientation can generate competitive intensity or sustainable competitive advantage, market turbulence, and technological turbulence, which help the business produce products and services that provide value for customers. Competitive advantage comes form the ability to shape buyer perceptions, preferences, and decision-making, in which technological and innovation are critical factors. Technical innovation and knowledge management also contributes to customer satisfaction.
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Business Performance: Market Orientation is likely to lead to improved performance because it is the organisational culture and climate that most effectively encourages the behaviours necessary for the creation of superior value for buyers and, therefore, continuous superior profit for the business.
In conclusion Market Orientation is a business culture that is outwardly focused. Its primary objective is to profitably create superior value for customers. Market-orientated businesses are customer driven, competitor knowledgeable and inter- functionally committed to understanding and capitalizing on opportunities for value creation throughout the value chain. Research has shown that market orientation is positively related to business performance, after controlling for theoretically important market level and business level factors. Therefore, market organisation is vital for every business.
"Organizations that are well educated about their markets stand out in their ability to rapidly sense and act on events in volatile and fragmenting markets."
Day S. Smith (Developing A Market Orientation. 1999. P. 248)