Is market orientation still relevant?
THE NOTION of market orientation places customer needs at the centre of all company activity. According to this philosophy, products and services are developed purely to meet customer needs. Narver and Slater (1990) identify three behavioural characteristics relating to market orientation. Customer orientation refers to understanding the potential customer’s needs so as to create additional value on an ongoing basis. Competitor orientation means that strengths, weaknesses, capabilities and strategies of a company’s key competitors are understood. Inter-functional coordination uses the company’s resources to create added value for target customers. Market-oriented companies are better placed to identify and capitalise on new opportunities and it seems that a clear link between market orientation and performance exists. Does your company measure up? Pelham (2000) and Schayer (2008) have suggested companies use a seven-item questionnaire to evaluate the level of market orientation. Each of the seven statements offers five options, anchored by descriptive phrases. Give it a try - circle the option that completes the sentence so as to best describe your company: 1. Our firm gives a (moderate 1 2 3 4 5 extreme)
amount of attention to after sales service. 2. Our firm is (somewhat slow 1 2 3 4 5 very fast) in detecting fundamental changes in customer preferences, competitive strategies, and other major changes in our industry. 3. Our firm responds (somewhat slowly 1 2 3 4 5 very fast) to negative customer satisfaction information. 4. Our firm measures customer satisfaction
(occasionally 1 2 3 4 5 systematically). 5. Our salespeople (occasionally 1 2 3 4 5 frequently) share competitor information with all of the other departments of the company. 6. We (occasionally 1 2 3 4 5 systematically) take advantage of targeted opportunities to take advantage of competitors’ weaknesses. In our firm we understand how the entire business can contribute to creating customer value (disagree 1 2 3 4 5 agree). Combine the scores of all the sentences to get a sense of your company’s market orientation. The higher the score, the higher the market orientation level of your company.