Market-Oriented Strategy: Definition & Overview

The old sales adage "the customer is always right" is a prime example of a market-oriented approach to marketing. This may seem like a no brainer and a requirement for staying in business, but it can actually backfire unless you make sure that your products and operations meet your own needs as well.

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A market-oriented strategy is geared toward learning as much as possible about customer needs and then working to meet those needs through products, services and customer service.

Many traditional companies have adopted and retained a product-oriented marketing strategy, which directs company energies toward upgrading and promoting a core group of offerings. These products reflect and embody the company's existing strengths, and the process of continuous improvement draws on resources already in place to promote a company identity that has already been developed. The product-oriented definition emphasizes satisfying existing customers with consistent quality and attracting new customers who want what the company already offers.

In contrast, a market-oriented strategy starts with the customer, does extensive research about taste and demand and then develops products that cater to those needs. Company strategies are developed around customer needs. This process may be cumbersome, but much of the marketing work is front loaded because the company has already ascertained that demand exists before launching the product. Once the product becomes available, marketing resources can be directed primarily toward getting the word out.

Although marketing professionals may discuss these two approaches as if they are completely different animals, they actually have more in common than such a discussion suggests. A product-oriented strategy cannot succeed without sufficient customer demand, and a market-oriented approach will go nowhere without a quality product. Even tried-and-true products have been developed and refined with customers in mind, and they have been refined over time in response to customer feedback.

Companies can also take a third approach to marketing: focusing on sales as an alternative to a product or market focus. A sales-orientation definition emphasizes communicating a marketing message to customers with the intention of closing as many sales as possible as quickly as possible. Like product orientation, sales orientation aims to drive demand rather than responding and trying to meet a need that customers have expressed. Like market orientation, it aims to please customers if this customer-centric approach will be most beneficial to sales.

Again, the similarities between the different marketing approaches are as important as the differences, which are often a matter of emphasis rather than overall direction. All marketing approaches measure their success in terms of sales, whether these sales are generated through a product or market orientation. A sales orientation simply measures results in terms of units sold rather than other metrics, such as customer retention or attention generated on social media.

A sales orientation especially makes sense at particular points in a product's life cycle or a company's life cycle. Toward the end of a product's life cycle when you have inventory you want to clear, sales matter more than marketing. Similarly, if you are exploring the possibility of selling your company or if you're looking to secure a big account or a large loan where strong sales history is relevant, selling will become a priority.

Your marketing efforts may not go anywhere if you gauge customer demand and then find that another company has created precisely the product that your audience has said it wants. If this occurs, you may be able to carve out a niche in the marketplace by doing further research to discover ways that your company can improve on the experience your competitors are providing. This will involve research into your competitors' products as well as analysis of consumer inclinations to find areas for improvement.

Competitor orientation can be a sound strategy because it allows you to analyze the field of competition in conjunction with the marketing research data you have collected. It can take you a step beyond a straightforward market orientation, fleshing out your understanding of the market by looking at competitors as well as customers.

At the same time, a competitor-oriented approach can lead to a narrow-minded focus on options that already exist, limiting your capacity to stoke out with a more creative offering. This is the antithesis of the marketing orientation known as blue ocean strategy, which focuses on developing products and services that meet existing needs in new and creative ways rather than fighting for market share in a crowded field.

An interfunctional approach to marketing is a holistic strategy that draws together the different strands that contribute to developing an understanding of what customers want and need and then creates products and services that meet these needs. An interfunctional orientation doesn't just focus on customers, sales promotions and competitors. It also incorporates internal company dynamics such as production schedules and communication between different departments.

An interfunctional orientation pulls together aspects of marketing and operations that naturally go hand in hand, just as product and market orientations aren't mutually exclusive but can be complementary, creating quality for the sake of meeting customer needs. You can't separate sales and marketing from production any more than you can develop and promote a product that you can't profitably produce. To be successful, any approach to marketing must interface comfortably and realistically with the many other puzzle pieces that make up your company.

A market-oriented strategy starts with the market, but it encompasses all the other elements that make it possible for your business to produce, sell and deliver products. The more these different aspects of your marketing strategy work in tandem, the more effective your efforts will be. Market orientation is a powerful starting point, one that provides valuable insights and objectives. However, your success will ultimately depend on an effective interfunctional approach that balances customer needs with internal logistics.

• Research drives sales. If you've put time and resources into gathering information about what your customers want and need, you'll have a greater likelihood of selling your products than if you blindly produce without considering demand.
  
  
• Customer satisfaction. If you tailor your products and services to demonstrated customer needs, your customers will be happier and will reward your business with their long-term loyalty.
  
  
• Meeting real needs. Market-driven product development is a response to actual consumer needs that can actually improve the quality of people's lives, adding to your employees' job satisfaction.

• Unrealistic customer expectations. It's easy for customers to say what they want when they don't have to think through the logistics of providing these options. Food service customers may want larger portions, fewer calories, lower prices and more organic ingredients. Your business will be forced to make tough choices and will be unlikely to satisfy everyone.
  
  
• Shifting customer demand. The needs and wants that your customers express may stem from fads and trends that have no real staying power. If you base your products and services on the shifting target of a command economy, you may have to make ongoing changes.
  
  
• Cost of research. Some marketing research, such as informal conversations and social media polling, can be inexpensive. Other ways of gathering information, such as focus groups and paying for professionally gathered data, can be quite expensive.