Marketing

Market Orientation – What Is It, And How Does It Work?

Soumava Goswami

Marketing September, 09 2023

Most companies look to convince their target customers of the value of their products and services so as to sell the product. However, many companies use the Market Orientation technique. It is a process through which a business identifies the needs of its target customers and uses that data to create products and develop services. Learning this marketing approach can help you decide whether it suits your business or not.

In this article, you will learn about the market orientation approach, how it works for businesses, and how businesses use this technique to market their products and services. In addition to that, we will discuss the major stages of the market orientation approach. Finally, we will share with you some of the major advantages and disadvantages of market orientation. Hence, to find out more, read on through to the end of the article.

What Is Market Orientation?

According to Investopedia,

“Market orientation is an approach to business that prioritizes identifying the needs and desires of consumers and creating products and services that satisfy them. Companies that have a market orientation consider the opinions and needs of their target market as a critical component of their research and development (R&D) for new products.”

In this concept, the company’s focus is on identifying the needs and preferences of its customers. With those needs and preferences, the company designs and develops its products and services with the primary objective of earning profits.

In this marketing and product development strategy, the job of the business is to interact more with its customers and observe their needs and requirements. To become profitable, the business turns its focus to the preferences of the customers. The business makes use of its variety of resources to fulfill the needs of its target customers.

The businesses that use this method are also aware of their competition in the marketplace. They make use of different techniques to identify different threats. The enterprises that follow the market orientation strategy invest a lot in innovation and product development so that they keep up with the changing demands of their customers.

How Does Market Orientation Work?

Market orientation is a strategy for marketing that businesses use to focus on their customer base, and create and sell products on the needs of the customers.

According to the Wall Street Mojo,

“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.”

A company that follows this strategy first does market research to find out its customer preferences. They make use of data analysis techniques to predict the desires of their customers. However, businesses that are already established and have good sales of their products use this strategy to improve their products or expand their product line.

Apart from that, using this strategy helps businesses to address issues associated with customer retention. Today, most companies follow the market orientation approach, as it helps them understand the needs and demands of their target customers better.

What Are The Stages Of Market Orientation?

The following are the stages of the market orientation strategy:

1. Initiation

In this stage, the business identifies all the potential threats for its business which might affect it. Apart from that, the business also researches what steps to take to handle the threats.

2. Reconstitution

Here, the researchers present the plans for the initiation stage to the employees of the business. With the managers point out to the employees about what steps to follow. Here, the organization also needs to ensure that all employees are ready for the change to happen.

3. Institutionalization

Here, the organization puts the plan into action. Here, they train employees and provide them with instructions on what steps to follow. This helps the employees to follow a pattern so that the business is able to cater to the needs and demands of the customers. Here, the plank is basically executed.

4. Maintenance

In this stage, the business continues the process and meets the customer requirements and demands, as per the initial plan. Here, the business tries to ensure that the plan is effective and everyone follows it to meet the business’s goal.

What Are The Advantages And Disadvantages Of Market Orientation?

According to Indeed.com,

“A market-oriented approach to business can help a company earn the trust and loyalty of its customers by showing them they’re a priority and that the business exists to serve them. It contrasts with conventional marketing, which attempts to convince customers of a product’s value while not necessarily prioritizing consumer preferences during product development.”

The following are the major advantages and disadvantages of market orientation:

Advantages Of Market Orientation

Here are the advantages of market orientation:

It helps to increase the overall revenue.
The business sees an increase in the market.
The customers are well-connected to the company.
Helps in innovation and product development.
It helps the business to enhance its market reputation, as the customers are happy with the products and services of the company.

Disadvantages Of Market Orientation

Here are the disadvantages of market orientation:

Continuous change is required, as the needs of customers change with time.
The company invests a lot in investment.
Research gets difficult as it is difficult to predict the preferences of the market.

Final Thought

Hope this article was helpful for you to get a better idea of the market orientation approach. You can see that it is really helpful for different companies to identify the needs and demands of their target customers. This helps them in developing new products and eventually sell them. Many top businesses use these principles to expand their products and services.

Even some of the major impractical demands from consumers help businesses make decisions in the long term. Hence, market orientation helps businesses to plan for the long term. What do you think of the market orientation approach’s importance for business? Share your thoughts and opinions in the comments section below.

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Soumava Goswami

A passionate writer and an avid reader, Soumava is academically inclined and loves writing on topics requiring deep research. Having 3+ years of experience, Soumava also loves writing blogs in other domains, including digital marketing, business, technology, travel, and sports.

Rogue Ways Of Marketing Your Business

In the middle of a cost of living crisis, every single penny that you spend on promoting your business needs to see a good return on your investment. Markets are contracting, and your share of that market will contract with it unless you put yourself out there and make more noise. Getting rid of marketing spending in order to save money is a false economy. A better approach as times get tough is to be more clever about your marketing. Turn the volume up, adopt new and different strategies, and push your own boundaries. Seek out activities that require very little cost but could elevate you above the general hubbub and give you the added exposure that is going to bring customers to your door. While every business is different, we’ve highlighted some of the ways you can take your marketing to a different level with a minimal budget and potentially good return. Ultimately what you decide to do will depend on your particular sector, but we hope that these ideas will get you thinking outside the box and encourage you to explore different marketing paths. Here Are Six Prime Ways Of Marketing Your Business 1. Newsjacking Newsjacking is the art of taking popular and trending news stories and linking them in some way to your service or product on social media. This could be anything from wishing members of the Royal family a happy birthday, to having an opinion on the latest contestants of Love Island, to making jokes about the latest political shenanigans. Newsjacking can generate more press, increase brand awareness, and attract new eyeballs to your business. 2. Customize ALL packaging This is particularly important for businesses with a physical business - whether you are selling luxury high-end products or basic ranges, your packaging is a constant vehicle for brand awareness. Going through the entire life cycle of a product, from design to delivery, every stage has opportunities to customize with more brand identity. From the packaging on the shelves to the plastic pallets that are used in transportation. 3. Sponsor a local artist to create a mural on your wall Does your business have a physical building? Could you maybe seek out a local artist who could paint you a mural on a large empty wall? You need to pay the artist (they do, after all, need to make a living!) But not only does it create a show-stopping public visual representation of your brand and company for all to see, but it can also produce its own press and publicity as something interesting and unusual. 4. Do a TikTok dance video with employees You may want to get your younger employees involved in this - but there’s usually a song and dance trending on social media. Set aside a few minutes each day to practice, and then make it a big social event among your employees for the actual filming. It’s a great team-building exercise. 5. Engage on social media Do you regularly post on social media? Even if you do, you need to do more than just post. You need to engage - as this is your opportunity to talk directly with potential customers. Take some time out each day to go through and engage with the posts of people you want to be targeting. Not only will this increase your presence in front of them, but it will also help with your own algorithms and get your own posts trending on more timelines. 6. Source support from your biggest suppliers The better you do, the better your suppliers do - partner up with your suppliers on different marketing activities and seek both financial and practical help and support from the. Read Also: 6 Tips For Growing Your Small Business And Boosting Your Bottom Line A Brief Guide To Business Integrated Planning The Resources You Need To Start Your Business

Market Cannibalization – Definition, How Does It Work, Example, And More

Market cannibalization is one of the worst things that a business can face with its products and services. It mostly happens when a company comes in with a new product for the market, and because of this, the demand for its original product starts to decline. This leads to the business experiencing losses not only in sales but also in revenue and market share. Hence, due to this fear, many companies hesitate to develop new products. In this article, you will also learn about market cannibalization, how it works for businesses, and the ways in which it affects a business’s market as well as its product line. We will take a look at the phenomenon with the help of a simple example. Finally, we will provide you with tried-and-tested steps to prevent market cannibalization in business. Hence, to learn more, read on through to the end of the article. What Is Market Cannibalization? According to Investopedia, “Market cannibalization is a loss in sales caused by a company's introduction of a new product that displaces one of its own older products. The cannibalization of existing products leads to no increase in the company's market share despite sales growth for the new product.” It works in most cases where the earlier product, as well as the new product of the business, share a common base of customers. It can also happen when a fast food outlet or chain store loses its customers after a store of the same brand starts operating nearby. It also happens when the new product is almost the same as the product that is already existing. Both these products have the same target audience. However, the introduction of the new product in the market puts the existing products of the business out of the market. This, in turn, affects the business a lot, as the business faces stagnant growth in the market despite an increase in sales of the new product it launched. Despite enticing new customers with the new products, the phenomenon results in attracting the already existing customers towards the new product as well. As an outcome, the sales and growth of the company get a major hit. Read More: Market Orientation – What Is It, And How Does It Work? How Does Market Cannibalization Work? According to Indeed.com, “Even with a detailed marketing plan, cannibalization may occur depending on how the general customer base reacts to the new product. Whether or not the products are competitive, customers may prefer the new one. A common reason why this happens is that two products may be too similar.” Let’s say a technology company sells smartphones. And they introduce a new one which is similar to the old one. The customers that were attracted to the old one now start liking the new one and purchase it. Hence, the new product was sold at the cost of the sales of the old one. Therefore, although the new product got major sales, the sales of the old product were affected. Hence, there is no increase in sales of the company. In fact, considering a new product was launched, the sales actually got affected. In various marketing campaigns, companies unintentionally, however, discourage their existing customers from using previous products. The tone of the marketing here suggests that the product has become obsolete as compared to the new one. Example Of Market Cannibalization Corporate Finance Institute gives a simple explanation of market cannibalization - “There are certain situations where market cannibalization cannot be avoided. For example, we now see tons of department stores that operate as online businesses as well. The store owners already understand the risk that its online sales can jeopardize those of its brick-and-mortar stores.” Let’s take an example of a well-known company - Apple Inc. When Apple releases a new iPhone with new features, it never shies away from explaining why the product is better than before. Furthermore, the company also ensures that the new iPhone reaches all Apple stores throughout the world. Hence, many people are attracted to the new one since they know that the latest one is better than the previous one, despite it being more expensive. As a result, the sales of the older iPhones start dropping. However, Apple makes up for this loss amazingly. It increases the price of the new one and also captures the current customers of its competitors. This helps in increasing Apple’s customer base. How To Prevent Market Cannibalization? - Steps To Follow The following are some of the major steps that you will need to take if you want to prevent market cannibalization in your company: 1. Determine Your Market Goals Before launching a product, have a clear idea of what are your goals with that. What do you want to achieve - customer loyalty? eliminate competition? filling a market-gap? - Find out through research. 2. Analyze Your Market Never ever launch a product without properly understanding your customers’ behavior and market dynamics. Always research the performance of your existing products and how much do customers like them. 3. Test Your Customers Before Extending The Product Find out your potential customers, and test the product beforehand. Ask for genuine feedback from the customers. You can do so by surveys, interviews, experiments, etc. Validate your assumptions based on results. 4. Monitor The Product’s Performance Monitor the performance of the product after its initial launch. You can use various metrics like - customer satisfaction, market share, profit, sales, etc., to evaluate the product’s extension. 5. Focus On Innovation Constant innovation and differentiation are required for your products if you want to avoid cannibalization. Keeping up with the needs and demands of customers might help. Read More: Matrix Organizational Structure – What Are Its Pros And Cons? Summing Up Hope this article was helpful for you in understanding the phenomenon of market cannibalization and how it affects businesses. In many cases, companies use it as a deliberate strategy to blow out competition, while sometimes, it results in the failure of the company itself to reach its target market. To stop market cannibalization from happening, consider following the aforementioned steps in the previous section. What is your opinion on market cannibalization, and do you have any recommendations to stop the same? Share your insights on the matter with us in the comments section below. Read Also: Matrix Organizational Structure – What Are Its Pros And Cons? Business Continuity Plan – What Is It, And How Does It Work? What Is Continuity In Business, And Why Is It Important?

Market Segmentation: Definition, Types, Benefits, And More

Marketing is only successful for a company when the company markets to the right people in the right way at the right time. This is where market segmentation comes into play. It helps businesses tailor their sales campaigns and marketing plans to target niche customers while making the promotion engaging and the product appealing. Businesses do market segmentation to narrow down their target market. In this article, you will learn about market segmentation and how it works for businesses. Next, you will also learn about the major types of market segmentation that marketers use for promoting products and services. Finally, we will also look at some of the major benefits and limitations of market segmentation. Hence, to learn more about this marketing strategy, read on through to the end of the article. What Is Market Segmentation? According to Investopedia, “Market segmentation is a marketing term that refers to aggregating prospective buyers into groups or segments with common needs and who respond similarly to a marketing action. Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another.” Here, the marketers of a company first find out the target market and then divide the market into small groups and subgroups. In this case, consumers in the small market segments share similar interests, needs, and characteristics. As a marketer, if you target a small group of a large market, you will be able to connect with consumers who are more likely to pay for products that appeal to them directly. Basically, if you use market segmentation, it will be easier to manage a large audience and segment them to create a personalized and targeted market experience. With market segmentation, as a marketer, you will be able to focus more on your marketing efforts towards your individual customer segments. This will help you to cater to the specific desires and needs of your target customers. Read More: What Is Continuity In Business, And Why Is It Important? How Does Market Segmentation Work? According to G2.com, “Market segmentation aims to introduce a tailored message that will be received successfully. This is advantageous for companies with a product or service in the marketplace that boasts multiple benefits or uses for different types of customers. Accept the fact that you can’t be everything to everybody, and as a marketer, you can’t solve everyone’s problem or appeal to every single person.” Hence, market segmentation is a useful and effective growth strategy that marketers implement to reach strongly with their offerings to the target audience. To identify different market segments within a market, companies use three criteria - The segment’s common needs (Homogeneity) The uniqueness of the group from others (Distinction) A similar response to the market (Reaction) Let’s take an example of an apparel store having different market segments for football players and basketball players. Being part of different groups, football players and basketball players respond to different advertisements. If the apparel company understands the uniqueness of these two different market segments, branding will be easier for them. What Are The Types Of Market Segmentation? The following are some of the major types of market segmentation that marketers implement to find out their niche market: 1. Demographic Segmentation Here, companies break the market segment into common demographics based on gender, age, income, race, education, occupation, and more factors. With this segmentation, companies assume that individuals belonging to similar demographics have similar needs. This is one of the most common methods of market segmentation. 2. Geographic Segmentation Here, the marketers segment a particular population based on factors like physical location. In this case, they assume that people living within a given geographical area have similar needs. It is a great strategy that larger companies use if they want to open new branches in a new place or want to expand their operations. 3. Psychographic Segmentation Here, the company tries to segment a population based on personality, lifestyle, opinions, and interests. This makes it one of the most difficult market segmentation approaches. This is because these are difficult to achieve since objective data are not available on these traits, and these traits change easily. However, if done properly, these provide the strongest results. 4. Behavioral Segmentation In this case, marketers depend a lot on consumer actions, market data, and the consumers’ decision-making patterns. Here, the grouping of the consumers is done based on how they have previously interacted with markets and products. The previous spending habits of the consumers show what they actually want. What Are The Benefits Of Market Segmentation? According to Shopify.com, “It’s easier to reach, target, and engage customers with a niche business that specifically appeals to a segment of the market. Use this strategy to identify the most profitable segments for your business. Remember, market segmentation isn’t a one-off activity, as consumer preferences change and new competitors emerge.” The following are the major benefits of market segmentation: Better resource efficiency The brand image gets stronger It creates a higher potential for brand loyalty Targeted advertising is better Market differentiation is more effective What Are The Limitations Of Market Segmentation? The following are a few limitations of market segmentation that you need to be aware of: The upfront marketing expenses are higher, as companies spend a lot on gaining data. Since a large market is under consideration, the product-line complexity increases as a result. Misassumptions are common, and this creates a lot of risk for marketers. The process of market segmentation can only be done if the data is reliable. Hence, it depends a lot on the source of data. Read More: Business Continuity Plan – What Is It, And How Does It Work? Wrapping Up With the help of market segmentation, marketers try to identify targeted groups of consumers so as to tailor their own products and services to make them attractive to the customer group. The segmentation is done in four main ways - demographically, geographically, psychographically, and behaviorally. With the help of market segmentation, companies can minimize their risks by finding out which products are the ones that are most likely to earn the attention of the target market. What do you think is the most important benefit of market segmentation? Share your opinions with us in the comments section below. Read Also: Marketing Mix – What Are The 4 Ps Of Marketing? Market Orientation – What Is It, And How Does It Work? Market Cannibalization – Definition, How Does It Work, Example, And More

The Power Of SEO: Elevating Your Online Presence

SEO (Search Engine Optimization) is a digital marketing strategy focusing on enhancing a website's visibility in search engine results. It involves optimizing website design, content, and coding, use of relevant keywords, building high-quality backlinks, and ensuring mobile-friendliness. This increases organic (non-paid) traffic from search engines like Google, Bing, and Yahoo, thus boosting brand awareness, credibility, and customer engagement. Hiring an SEO analyst for a website is critical in today's digital age. They optimize your website to achieve higher search engine rankings, increasing your site's visibility. More visibility leads to more traffic, potentially translating into higher sales or wider audience reach. Moreover, an SEO analyst understands the latest trends and algorithms, keeping your site relevant. Thus, an SEO analyst plays a crucial role in the online success and growth of your business. Understanding SEO SEO, or Search Engine Optimization, works by enhancing various elements of a website so it appears higher in search engine results. It involves the incorporation of relevant keywords and phrases in a website's content, such that search engine 'crawlers' can identify them. This, along with other factors like UX/UI design and backlinks, helps improve website ranking and visibility, thereby generating more organic traffic. SEO is a critical aspect of digital marketing strategy. SEO (Search Engine Optimization) offers several benefits to your website. It improves your site's visibility and rankings on search engines, thereby increasing organic traffic. With SEO, you can target specific demographics and convert visitors into customers by enhancing the user experience through relevant content. It also builds your brand credibility, as search engines are trusted by users. Plus, it's a cost-effective strategy for long-term business growth. The Significant Role of an SEO Analyst An SEO Analyst is responsible for improving a company's online presence by optimizing its websites for search engines. Their duties encompass researching and implementing keyword strategies, improving website ranking and traffic, analyzing performance through SEO tools, and generating reports to illustrate progress. They also work on website design to ensure it is user-friendly and often cooperate with content creators to incorporate SEO best practices. The overall aim is to increase visibility and conversions. An experienced SEO Analyst can profoundly impact a business website. Their expertise can optimize a website's visibility, increase its ranking on search engine result pages, boost organic traffic, and improve conversion rates. The analyst's ability to perform comprehensive keyword research, analyze competitors, and understand algorithm changes is vital to maximize the site's potential. Essentially, the expertise of an SEO Analyst can elevate a business's online presence and increase revenue. The impact of SEO on website visibility SEO, or Search Engine Optimization, plays a significant role in enhancing website traffic. It involves optimizing a website and its content with relevant keywords, enhancing the site’s visibility in search results. SEO not only helps in attracting more visitors but also attracts quality traffic with higher conversion potential. The more SEO-friendly a website is, the higher it ranks on search engines like Google, leading to increased visibility and consequently higher website traffic. Website ranking on search results is crucial for digital visibility and business growth. It directly affects the amount of traffic your website receives. A higher rank increases the chance of internet users finding and engaging with your business. It's also a sign of credibility and relevance to both search engines and users, contributing to user trust and brand reputation. Therefore, optimizing your website for search engine ranking is an essential part of online marketing strategies. Choosing the right SEO Analyst When hiring an SEO Analyst, consider their analytical skills, understanding of SEO trends, and proficiency in SEO tools. Experience in keyword research, content optimization, link building, and SEO audits is vital. They should understand your business niche and have a proven track record of improving website rankings. It’s also crucial that they possess excellent communication skills to effectively articulate strategies and suggest improvements. A certified SEO Analyst with technical expertise can drive your business's online visibility. When examining an individual's portfolio or previous work, look for consistent quality, creativity, and versatility. Ensure that their style aligns with your project or company's aesthetic. Their portfolio should showcase a range of skills and be updated with their most recent work. It's also essential to assess practical elements like their ability to meet deadlines and their responsiveness to feedback. If possible, look for testimonials or seek out reviews of their past performance. The process of SEO analysis A typical SEO audit involves an examination of a website's on-page and off-page performance to determine its rank-ability on search engines. This process includes analysis of website speed, mobile-friendliness, URL structure, meta descriptions, keyword relevancy, and backlinks. The audit aims to identify issues that could be hindering the site's organic search performance and provides recommendations for necessary improvements to enhance SEO effectiveness. Continuous SEO monitoring and updating are vital for maintaining and enhancing the online visibility of a website. It helps keep your site relevant in ever-changing digital landscapes by adapting to updated algorithms, user behavior, and market trends. Continuous SEO activities not only ensure a higher ranking in search engine results, but also improve user experience, leading to increased traffic, conversion rates, and return on investment. Without consistent SEO monitoring and updates, even the best-planned strategies can become ineffective. The potential ROI on hiring an SEO Analyst An SEO analyst can significantly increase your revenue by improving your website's visibility on search engines. They devise strategies to amplify your content's reach, ensuring it appears in relevant keyword-related searches. This increases your chance of attracting and converting prospective clients, driving more high-quality organic traffic to your site. With their expertise in user experience, conversion optimization, and web analytics, an SEO analyst assists in creating an engaging and user-friendly website that heightens customer retention and boosts sales. Hiring an SEO analyst may seem expensive initially; however, the potential benefits often outweigh the costs. An SEO analyst can boost your website's ranking on search engines, increasing visibility and bringing more organic traffic. Higher traffic usually translates to more leads and sales, subsequently improving your business's revenue. Thus, though the upfront costs for hiring an SEO analyst can be high, the potential return on investment can make it a financially valuable decision. Read Also: How To Optimize Your SEO Strategy For Startups The Benefits Of Hiring An SEO Company In Los Angeles Apptivo CRM Review: The Most Versatile All-In-One CRM Tool

Market Orientation – What Is It, And How Does It Work?

What Is Market Orientation?

How Does Market Orientation Work?