Market Orientation

What is Market Orientation?

Market Orientation is a marketing concept wherein the company focuses on identifying the customer needs and preferences and accordingly, designs and sells products and services based on those needs and preferences with the primary objective to earn profits.

This strategy suggests that businesses shall observe what are the requirements and needs of the customer, and based on those demands, they shall design and sell their products and services.


The Following are characteristics of market orientation.

#1 – Customer-Oriented

The strategy is based on the demands and requirements of the customer and advises that enterprises shall, to be profitable, turn their focus on customer preferences. The enterprises which follow this strategy deploy their resources for the fulfillment of customer needs.

#2 – Realizes Competition

This strategy also realizes that it is vital to identify competition and threats to the business, apart from identifying customer needs. A business that is not able to identify potential threats may incur damage in the future.

#3 – Product Development

The enterprises which follow this strategy are involved in product innovation and development to enable themselves to meet the changing needs of customers.

#4 – Functional Coordination

In an enterprise, which follows the strategy, the different functional departments of the enterprises tend to work in coordination with each other for excellent quality of goods and services.


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How Does it Work?

Market orientation is a business marketing strategy that focuses on its customer base for the designing and selling of products and services. The strategy involves analysis and research of the requirements, concerns, and suggestions of the customers with respect to the particular product or service in which the enterprise deal. This way, the enterprise will be aware of itself of the trends in customer preferences. It will enable the company to modify or design its product or services in line with customer preferences.

Example of Market Orientation

Let us take an example of an automobile manufacturing unit that produces cars. It might be producing different models and categories of cars. However, if it follows market orientation, it will conduct research as to what are the models that are demanded by the customers and what are the features that they look for in the cars!

Stages of Market Orientation

Stages of Market_Orientation

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There are various stages involved in market orientation creation.

  1. Initiation

    It is the first stage, wherein the enterprises identify the potential threats that may affect them. Along with threats, they also research as to what steps can be taken to handle those threats.

  2. Reconstitution

    In the next phase, the employees of the enterprise are presented with the plans that are identified in the initiation stage, which are required to be followed. Enterprise needs to ensure that all the employees are ready for the change, and those who are not prepared will be required to leave the enterprise.

  3. Institutionalization

    The plan is put to action in this stage. It is a crucial stage, and many training sessions are held for employees so that the enterprise can now cater to customer needs. Thus, the execution of the plan is done under this stage.

  4. Maintenance

    It is the final stage. It is ensured that the plan continues to remain effective and is being followed by everyone properly. The enterprise continues to meet customer demands and requirements, as suggested in the initial plan.

Market Orientation vs. Product Orientation

Market orientation is a strategy that focuses on customer preferences and requirements. It suggests that the company should focus its design and sale of products based on the requirements and demands of the customers to be profitable.

On the other hand, product orientation strategy focuses on improving the quality of the product it makes regularly. It does not associate itself with the requirements of the customers, instead focuses on how it can improve its product.


Companies that follow market orientation enjoy various benefits.


  • As customer needs keep changing, it calls for continuous changes by the company in its products and services.
  • A large portion of the company’s budget is spent on research work.
  • In the dynamic market conditions, it is difficult to predict what the future could be with respect to customer preferences, and thus, it requires lots of planning.


Market orientation is based on customer needs and preferences. This strategy, combined with other business strategies, may become very useful for the companies.

Recommended Articles

This article has been a guide to What is Market Orientation and its definition. Here we discuss an example of market orientation and its types, characteristics, differences. You can learn more from the following articles –