Defining a market-orientated culture.
What exactly is a market-orientated culture? [Harris & Ogbonna|Harris, LC and Ogbonna, E (2001) Leadership style and market orientation: an emperical study. European Journal of Marketing, Vol 35, No 5/6, pp744-764] have indicated that it has many labels:
1. Customer orientated.
2. Integrated marketing.
3. Market orientated culture.
4. Marketing orientated
5. Market led.
Whichever label is chosen, the most important aspect to remember is that market orientation is a form of organizational culture, covering the whole business and provides superior customer value [(Narver & Slater)| Narver, JC and Slater, SF (1990) The effect of a market orientation on a business profitability. Journal of Marketing, Vol 54, October, pp 20-35.]. There are other options that companies can adopt, either by design or accident [(Pearson)| Pearson, G (1993) Business orientation: cliché or substance? Journal of Marketing Management.Jul 1993, Vol. 9, Issue 3, pp233-243.]. Table 1.1 provides an adapted summary of Pearson thoughts: although it now includes sales oriented cultures.
Table 1.1: Business orientated cultures.
Clearly, a market orientation culture will provide the best solution for a business. There is however one concern: it tends to focus on what the customers think they need. It was [Doyle & Stern| Doyle, P & Stern, P (2006) Marketing Management and Strategy, Prentice Hall.]. who promoted the idea of incipient markets: they cater for the needs of customers who don’t actually recognize it at the initial stages. It is the advancements in technology, particularly relating to the internet, which is creating opportunities for businesses to generate value propositions that have never been considered by its customers. A good example was the introduction of Itunes from Apple, a classical incipient market case.
With this in mind, is it right for a business to focus purely on market orientation? Would an even greater “superior customer value” be created if there was some balance between market and innovative oriented cultures? Unfortunately this report is unable to tackle these questions, but will recommend that further research is completed in this field.
Achieving a market-orientated culture.
There have been many studies indicating how a market orientated culture can be implemented ([Hooley et al| Hooley, G et al (2008) Marketing strategy and competitive positioning. 4th ed. Harlow, Pearson Education Ltd.]; [Kotler et al| Kotler, P et al (2005) Principles of Marketing, Pearson Education.]; [Narver & Slater| Narver, JC and Slater, SF (1990) The effect of a market orientation on a business profitability. Journal of Marketing, Vol 54, October, pp 20-35.]). The key components are illustrated in figure 1.1:
Figure 1.1: Components needed to implement a market orientated culture.
Unfortunately this is a rather simplistic view and the realities of implementing this new culture in a multinational company make it extremely complex and time consuming. It was [Lambin| Lambin, JJ. (2000) Market-Driven Management: Strategic and Operational Marketing. Macmillan.] who stressed the importance of building internal capabilities and support from top management to facilitate a market orientated culture implementation. Conversely, in an earlier review, [Harris| Harris, L.C. (1996) Cultural obstacles to market orientation. Journal of Marketing Practice: Applied Marketing Science, Vol. 4 No. 2, pp36-52.] illustrated the types of barriers businesses were likely to face, indicating that senior managers were the main obstacle; driven by their lack of skills and experiences.[Harris| Harris, L.C. (1996) Cultural obstacles to market orientation. Journal of Marketing Practice: Applied Marketing Science, Vol. 4 No. 2, pp36-52.] went on to say that a prerequisite for success is the internal marketing that needed to take place ensuring the “hearts and minds” of the organization were gained. A business must start by “sowing the seeds” and letting the concept grow.
This will mean that education and the management of change now become the key components: this philosophy is supported by [Payne|Payne, AF. (1988) Developing a market orientated organization. Business Horizons, Vol 31, May-June, pp46-53] and [Kelly|Kelly, SW. (1992) Developing customer orientation among service employees. Journal of the Academy of Marketing Science, Vol 20. No 1, pp 27-36.]. Yet, the primary driver for change is leadership ([Conner|Conner, DR (1992) Managing at the speed of change. New York, Villard Books.]. In addition to “Transformational” and “Competence Based” leadership, businesses need to include [Adair’s|Adair, J. (2002) 100 Greatest Leadership Ideas. New Jersey, Wiley] “Action Centred Leadership” principles to support the creation of a market orientated culture (see figure 1.2):
Figure 1.2: An adaptation of Adair’s (2002) Action Centred Leadership model.
The development of the team and the individuals within that team becomes critical, and as [Robbins & Finley|Robbins, H. and Finley, M (2000) Why teams dont work. London, Financial Times Books.] stated, it will create trust, which is one of the foundations for a market orientated culture. With its basic infrastructure now in place, a business can begin with the development of the market orientation plan by utilizing [Doyle & Stern’s|Doyle, P & Stern, P (2006) Marketing Management and Strategy, Prentice Hall.] process map (see figure 1.3):
Figure 1.3: An adaptation of Doyle & Stern’s Market Orientation process implementation map.
The impact on competitiveness and long term sustainability.
What can a market orientated culture do for a business? As it has already been discussed, it may take many years before a business sees the benefits of such a culture. It is highly likely that there will be an increase in competitiveness and long term sustainability driven by:
1. The creation of a well organized structure, working across functions that are highly motivated and task oriented. It will utilize tried and tested processes for gathering and dissemination of information across all functions ([Lambin|Lambin, JJ. (2000) Market-Driven Management: Strategic and Operational Marketing. Macmillan.]).
2. The team will be able to provide the business with a strong competitor understanding, allowing it to proactively adjust strategies to maintain its market position and build barriers to restrict others from entering ([Narver & Slater|Narver, JC and Slater, SF (1990) The effect of a market orientation on a business profitability. Journal of Marketing, Vol 54, October, pp 20-35.]).
3. The team will have a greater understanding of its customer’s needs and wants: ensuring that it can continually update its value proposition, keeping it as the market leader and most respected brand ([Kotler|Kotler, P et al (2005) Principles of Marketing, Pearson Education.]).
4. It will ensure that the business focuses on the longer term, allowing it to build strategies which sustain the competitiveness of the category ([Hooley|Hooley, G et al (2008) Marketing strategy and competitive positioning. 4th ed. Harlow, Pearson Education Ltd]).
5. It will develop a culture that is directed by leaders who are visionary and competent to complete the task.
The creation of a market orientated culture will no doubt be the hardest task for the marketing team. There are still many obstacles to overcome and there is still some doubt if it is completely the right thing to do: balancing the potential opportunities provided by an innovative culture with that of a market orientated one could be a better option because as [Doyle & Stern|Doyle, P & Stern, P (2006) Marketing Management and Strategy, Prentice Hall.] indicated it creates incipient markets. These cater for the needs of customers who don’t actually recognize at the initial stages.
In any case even without this adaptation, there can be many benefits which will no doubt ensure the continual competitiveness and sustainability of the business.
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Credits: The picture used in this blog is an adaption of ANANKKML's work from: http://www.freedigitalphotos.net/images/view_photog.php?photogid=1674