By adopting the marketing concept, companies have all functions aligned with the strategic vision of meeting the needs of customers. This helps define the role of employees more clearly. Marketers must perform diligent research to uncover needs and convey messages that explain benefits. Production should focus on fine-tuning products to meet the needs of customers. Support and service should have openness to customer feedback to report back to production and research. Company leadership must set the tone by making customers the priority.When companies have a good understanding of what the market needs or wants, they have better ability to market effectively to them. Marketers research the market well to understand not only what is needed, but how to convey messages that clarify how their products align with those needs.Consistently understanding and delivering what the marketplace wants leads to long-term profitability. Companies can turn one-time buyers into repeat customers, with an ultimate goal of developing many loyal customers. Loyal customers buy more frequently and in larger volumes. They are also less susceptible to competition and more willing to pay higher prices. All of these business benefits mean the company has much better ability to remain viable and successful as long as it retains the marketing concept.
There have been positive relationships found between market orientation and a range of financial performance measures including business profitability, operating profits, profit-sales ratio, cash flow, return on investment, return on assets, and long run financial performance. Being able to demonstrate the impact of market orientation on a company’s bottom line is important if funds are going to be devoted to developing a market orientation.
The impact of a market orientation on a company’s financial performance stems from the provision of superior customer value. If an organisation offers a product with superior customer value, then they will have more satisfied customers, more repeat sales, and therefore greater sales revenue. If customers are satisfied they will also be a source of word-of-mouth recommendations, hence increasing sales and profits further.
Much of the improvement in financial performance may come about from the organisation being integrated in its approach to satisfying customer needs. Implementing a market orientation program can act as an initiative to eliminate activities and processes that do not add value to the customer. As information is disseminated, activities that are performed in duplicate are also identified and eliminated. This reduces internal costs and impacts on operational efficiency and the bottom line.
An organisational commitment to a market orientation has been found to have benefits for employees as well as customers.
An important component of developing a market orientation involves making employees aware of the common goal they are trying to achieve (customer focus), and understanding what their individual role is in this process. This decreases role ambiguity and demonstrates to employees that they are making a positive contribution to the organisation. Employees derive a sense of pride in their own work and in belonging to an organisation with a positive focus.
Therefore, accomplishing this objective leads to job satisfaction, commitment to the organisation, and trust in senior management. Subsequently, a better work environment for employees and increased productivity leads to overall organisational success.
From the organisation’s viewpoint additional benefits of developing a market orientation include increased productivity, worker satisfaction, employee quality of work life, lower turnover and absenteeism, and improved interfunctional teamwork. When employees identify with the norms and values of an organisation (such as market orientation), they are less inclined to be discouraged...
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