Market Orientation

Updated on March 19, 2024
Article byNiti Gupta
Edited byNiti Gupta
Reviewed byDheeraj Vaidya, CFA, FRM

Market Orientation Definition

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 of earning profits. This process is conducted at different stages and differently depending on the company’s financial and market standing.


Market orientation marketing is based on customer needs and preferences. This strategy, combined with other business strategies, may become very useful for the companies. This strategy suggests that businesses shall observe the requirements and needs of the customer, and based on those demands, they shall design and sell their products and services.

Key Takeaways

  • Market orientation is a marketing concept in which a company finds customer wants and preferences before producing and selling products and services based on those needs and preferences to profit. The client’s wants and preferences are essential to market orientation. This strategy is beneficial when used with other commercial tactics.
  • Market orientation characteristics include client orientation, competition, product development, and functional coordination.
  • the market orientation technique has four stages: start, reconstitution, institutionalization, and maintenance. This technique proposes that firms watch the customer’s wants and needs and then create and market their products and services in response to those requests.

Market Orientation Explained

Market orientation is a business marketing strategy that focuses on its customer base to design and sell products and services. The strategy involves analyzing and researching the customers’ requirements, concerns, and suggestions concerning the particular product or service the enterprise deals with. This way, the enterprise will be aware of the trends in customer preferences. It will enable the company to modify or design its product or services according to customer preferences.

In a marketing-oriented organization, the primary focus is on understanding customer behavior, conducting market research, and gathering insights to create products or services that meet specific customer demands. This approach recognizes that customers have diverse needs and aims to deliver superior value and satisfaction.

One of the key advantages of marketing orientation is its customer-centric nature, which allows businesses to build strong and lasting relationships with their customer base. By consistently delivering products or services that align with customer expectations, companies can foster brand loyalty and repeat business.

Moreover, marketing orientation promotes adaptability. It encourages businesses to stay attuned to changing market trends and customer preferences, enabling them to respond quickly to shifts in the competitive landscape.

In essence, the marketing orientation approach is vital for financial success because it helps businesses identify profitable opportunities, mitigate risks, and maintain a competitive edge. It ensures that resources are invested wisely in areas that will yield the highest returns, ultimately contributing to a company’s bottom line and long-term growth. For finance professionals and investors, understanding a company’s marketing orientation is essential for assessing its potential for sustained profitability and shareholder value.

Financial Modeling & Valuation Courses Bundle (25+ Hours Video Series)

–>> If you want to learn Financial Modeling & Valuation professionally , then do check this ​Financial Modeling & Valuation Course Bundle​ (25+ hours of video tutorials with step by step McDonald’s Financial Model). Unlock the art of financial modeling and valuation with a comprehensive course covering McDonald’s forecast methodologies, advanced valuation techniques, and financial statements.


Let us understand the characteristics of taking the market orientation approach through the detailed explanation below.

#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 that follow this strategy deploy their resources to fulfill 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 cannot 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 that follows the strategy, the different functional departments tend to coordinate with each other for the excellent quality of goods and services.



Now that we understand the basics and characteristics of market orientation marketing and other such uses, let us apply the theoretical knowledge into the examples and its practical applications.

Example #1

XYZ Tech, a software firm that keenly prioritizes customer-centricity in its strategy. By continually assessing customer preferences, XYZ Tech identifies a rising demand for user-friendly cloud-based project management software with advanced collaboration features among its business clientele.

Through diligent market research and feedback analysis, XYZ adjusts its resource allocation to focus on developing this in-demand product. They also fine-tuned their pricing strategy to make the software accessible to small and medium-sized enterprises, a key segment in their target market.

The company’s dedication to understanding and serving customer needs pays off with the successful launch of its innovative project management platform. This software not only meets but surpasses customer expectations, resulting in widespread adoption among businesses seeking streamlined project management processes.

As a direct outcome of its market-oriented approach, XYZ Tech experiences remarkable revenue growth, expands its market presence, and enjoys heightened customer loyalty.


Now that we have a fair enough knowledge of the market orientation approach, let us also discuss the different stages at which this approach is applied through the discussion below.

Stages of Market_Orientation

You are free to use this image on your website, templates, etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: Market Orientation (

  1. Initiation

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

  2. Reconstitution

    In the next phase, the enterprise employees 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 at 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. The enterprise continues to meet customer demands and requirements, as suggested in the initial plan. It is ensured that the plan remains effective and is being followed by everyone properly.


Let us understand the advantages of market orientation marketing through the points below.


Despite the advantages, there are a few factors of the market orientation approach that prove to be a disadvantage. Let us understand them through the discussion below.

Market Orientation vs. Product Orientation

Let us understand the differences between two of the largest forms of orientation that businesses must ideally go through the comparison below.

Market 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.

Product Orientation

  • The product orientation strategy focuses on improving the quality of the regularly made product.
  • It does not associate itself with the customers’ requirements, instead of focusing on how it can improve its product.

Frequently Asked Questions (FAQs)

Why is market orientation important?

Market orientation, when used efficiently, may assist a firm in increasing customer retention and propelling expansion in new demographics. However, market orientation can disclose client needs that are too expensive or difficult to achieve.

When did market orientation begin?

Around the 1940s, industries realized that focusing only on their business needs frequently left customers unhappy. At this level, organizations’ marketing approaches involve determining their clients’ wants and successfully tailoring actions to meet those requirements.

What does the market orientation approach emphasize?

Market orientation is a business approach that prioritizes recognizing consumer wants and desires and developing products and services to meet them

How can market orientation lead to sustainable business growth?

Market orientation fosters customer loyalty and satisfaction, which leads to repeat business and positive word-of-mouth recommendations. Satisfied customers are more likely to advocate for the brand, contributing to sustainable growth and profitability.

Recommended Articles

This article has been a guide to what is Market Orientation and its definition. Here we discuss its example, characteristics, & compare it with product orientation. You can learn more from the following articles –