MARKET ORIENTATION

Market Orientation in Today's Competitive Environment

Market Orientation in Today's Competitive Environment

Introduction

Marketing is a management function that is typically used to identify and understand the consumers' needs and wants. It then coordinates with the rest of the organization in order to deliver the superior value to at least match the needs and wants (Kara, Spillan & Deshield, 2005: 106). Marketing academic advises that firms' activities should be drove by the philosophy of the marketing concept. Marketing academic also beliefs that firms' superior performance will be the inevitable result if they can adopt this philosophy and effectively convert is to actions. (Pelham, 2000: 48). However, we cannot deny the predominant contribution of the philosophy of the production orientation in the last century. There are many firms that had succeeded with focusing on technical or production capabilities, instead of applying the market orientation. Nevertheless, the time has been changed. Along with the trends of globalization, deregulation, and more sophisticated customers, have all resulted in a more intense competitive environment (Pelham, 2000: 48). Thus, the philosophy of the marketing concept will become more and more vital factor for any sizes of businesses, which can decide the life of the business.

Market orientation has been identified as the most crucial success ingredient for both small and large companies (Verhees, 1999: Online). Unfortunately, many small businesses' failure results from the ignoring the factor of market orientation. The lack of understanding about the target market can be ranked the top 10 reasons for small business failure. Due to the ponderance of this factor, it can quickly lead to many other problems, such as cash flow problem.

Two different views of market orientation

According to Adonisi (2003: Online), "market orientation can be defined as the organization wide generation of market intelligence pertaining to current and future needs of customers, dissemination of intelligence horizontally and vertically within the organization, and organization-wide action or responsiveness to market intelligence". From this definition of market orientation, it offered a process-driven model that emphasizes on the stages of generating, disseminating, and responding to market intelligence as the essence of market orientation (Kara et al, 2005: 107).

From anther perspective, market orientation can also be categorized into the following subcategories: customer orientation; competitor orientation; and interfunctional coordination and two decision-making criteria (long-term focus and profit focus) (Kara et al, 2005: 107). Although the classified methods are different between above two classifications, they share the same purpose of better integrating efforts among all levels of the organization to deliver high customer satisfaction to target market.

Many literatures argue about which component of market orientation is the most important one. Some of them realized the customer orientation would be the most important component over others as it can be viewed as the most fundamental aspect of market orientation. However, as each of these three parts is critically important for gathering, allocating, and responding to market information. We agree with Narver and Slater's perspective, which the three components contribute equally to the construct of market orientation (Zhou, 2007: ...