Marketing is an essential tool that can be used to promote and improve the performance of a particular organization. In business, marketing is especially so when there is high competition in the market. Despite the nature and scope of the market, there needs to be a marketing strategy for organizations to boost their sales and sometimes improve the image of the company. Whether a company is a monopoly in the market, or in a competitive market, customers need to be aware of existing products or services that a company offers. However, marketing is more prevalent in companies that are market-driven and are adversely affected by the trends in the market. Hence, it is crucial for organizations that are driven by the changes in the market forces to give higher priority to marketing as a strategy for improving performance and increasing sales in an organization. Subsequently, this paper aims to analyse both theoretical and empirical literature to show how market-driven businesses emphasize on marketing at the centre of the organization. Through review of existing evidence, this study will outline the key concepts and approaches that have been used in marketing. Further, the paper will analyse how these concepts have been applied in the real world and what impact they are likely to have on stakeholders in an organization.
To understand the concept of market-driven businesses a review on the definition will be done so as to understand the various aspects of marketing strategies undertaken by the businesses. Being market-driven can be viewed as the ability to be affected by the changing trends in the market that might be caused by competition, change of taste or cultural transition in a society. In regard to marketing, a business can be affected by various factors such as changes in technology, consumer preference changes, the entrance of new competition, the introduction of substitute products and other market forces such as inflation. These changes in the trends in the market mostly affect the actions of business organizations. Organizations will tend to focus on the changes in the market and make necessary adjustments to adopt in the business environment (Javalgi, Martin and Young, 2006). This focus on the changes in the market trends by an organization with the aim of maintaining and improving its customer base is termed as market orientation. One key action that aids in market orientation is marketing. However, having viewed that focusing only on the market reduces the firm’s objective to concentrating on the customer base; the organization should consider diversification of the approaches used (Kumar et al., 2011). Despite customers being key components are a part of the many stakeholders that a business should focus on to improve on turnover and service delivery structures. In the study, Kumar and colleagues discuss that changes in market trends are an opportunity for businesses to learn but not to establish market orientation mechanisms. This is due to the fact that the adoption of market orientation as a philosophy business is guided by the need to meet the expectation of the consumers even at the midst of changing trends in the market due to factors such as technological trends. Therefore instead of making the consumers use the products being produced by the business, the business should work to tailor the product or create a mix of products that suit the consumers amidst the changing trends. The philosophy is important in ensuring the business continues to meet the needs of the consumers despite the changing trends and therefore ensuring sustainability of the business.
The idea that market orientation is not sustainable can be critically reviewed by analysing literature to establish whether there is a need for market orientation or not. Scholars have developed different approaches that show market orientation can be effective in an organization. This is particularly so through understanding the market topography and developing marketing strategies for an organization. The study of Lambin and Schuiling, 2012, is the first dispute the idea established in ascertaining sustainability of the of market orientation (Kumar et al., 2011). In this contrary study, Lambin, and Schuiling use the entrepreneurial market orientation model to establish that being market driven does not necessarily mean focusing on the customer. In fact, the model indicates that being market driven gives an organization an opportunity to analyses the entire existing stakeholder in the market. These stakeholders will include suppliers, distributors, persons influencing the market and also customers. Being market-driven therefore helps businesses organizations to develop marketing tools that might be either strategic or operational (Lambin and Schuiling, 2012). Strategic marketing helps the firm to act proactively or in some areas take responsive actions while on the other hand operational marketing will mainly entail building relationships and making transactions with all stakeholders. This strategy therefore indicates that using marketing in a market-driven business is a tool that integrates all stakeholders to coordinate the production process in ensuring that the needs of the consumers are met through the products being produced by the business. Therefore, to ensure the success of market-orientation approaches, the business should continuously anticipate changes in the consumer trends and respond effectively through the production of products that address the anticipated changes.
In further analysing the relationship that connects customer relationship management, market orientation and the global market service exploration, Javalgi, Martin and Young, 2006, try to establish on how service marketing can affect customer traits in developing effective customer relations. In this in-depth study, a conceptual framework of a model is used to link service market research, customer characteristics and customer relationships management. This study that puts service market research and the customer at the centre confirms that developing a good customer relationship will require the acquisition of knowledge of the customer. Information about the customer can be obtained mainly through service market research which is in turn linked to market orientation. To this end, the study regards that market research as part of a marketing tool is essential in understanding the customer. Therefore, organizations, on learning about the customer through research, can develop programs that will encourage customer retention and customer loyalty (Javalgi, Martin and Young, 2006). As a result, the firms can be able to predict customer lifetime and hence establishing a cycle informed by market research that substantially helps in improving the customer relationship management.
Through modelling of a hypothesis, Ngo and O’Cass, 2012, have been able to build on another theory and come up with a framework that links market orientation to particular outcomes through the use of marketing resources and proficiencies. In the study, being market-driven is seen as a driver of that provides resources and prophecies that are positioned at a useful level. The study further explains how the marketing resources such as knowledge on commodity and circulation of product relate to the firm’s ability to leverage on the information and act appropriately. The study reiterates that market orientation is a source of information that puts an organization in a better position to serve its customers further observing that market orientation go hand in hand with marketing in creating customer value (Ngo and O’Cass, 2012). It is hypothesized that market orientation as a variable has a positive relationship with two market variables. These variables are market resources and capabilities. In addition, the hypothesis of the research ascertains that there is a positive relationship between the three variables and the performance of a firm. This relationship shows that being market driven can substantially affect the extent to which a firm has access to market resources and capabilities. This, therefore, indicates that organizations that are driven by the market can use marketing resources and capabilities to improve the performance of the firms.
In another study, it has been established that market orientation can be a good way of establishing marketing research (Javalgi, Martin and Young, 2006). This research has established that marketing can be an important strategy that leverages on the idea of being market driven. This is because being market driven puts an organization at the center of the transforming market. As a result, an organization is able to draw data from all the stakeholders in the market and therefore develop marketing strategy tools that will be relevant and up to date in the prevailing market. In the study that tries to relate market research, market orientation, and customer relations, it is established that being market driven becomes a learning opportunity for an organization. Organizations can get to learn about the various stakeholders they do business within the industry. Having information about your stakeholder, for instance customers, can help an organization to market itself well to in a way that can improve customer satisfaction (Javalgi, Martin and Young, 2006). In correspondence with the market provides the necessary information that an organization needs to know about their stakeholders. Although in the study the limitation is given to the customer who is the key stakeholder, the model developed that puts the market orientation centrally can be used to research and improves marketing to investors, suppliers and also distributors. The developed marketing strategies can be applied both locally and in the international market.
Accordingly, marketing in market-driven organizations has been stipulated as a way that organizations can use to come up with strategies to compete in the market. However, studies have shown that for the strategy of marketing to work effectively, the organization should put a consideration in other factors such as having a rigid market orientation system (Lambin and Schuiling, 2012). A market orientation that is not rigid can reduce the competitiveness of an organization significantly. Challenges that arise from monitoring the environment in a market-driven organization should be identified promptly and solved. Apart from the monitoring challenge, an organization should be aware of the entrance of new products in the market. Marketing is a market-driven organization also has cost implications on the projects that might be taken towards product and sale promotion. In addition to the challenge of a weak market orientation, organizations should look out for the upcoming trends that are changing in the marketing organization.
Although an extensive part of the preceding study has shown that marketing in a market-driven organization can be broad and achievable, the extent of involvement of stakeholders has been indicated to be limited. In a study advocating for the need to shift from market orientation to stakeholder orientation, it has been indicated that the market orientation is limited mainly to two groups of stakeholders (Ferrell et al., 2010). The outlined groups are the customers and the competitors. It was indicated that there is a possibility of an organization losing out on key information from other stakeholders such as the community, employees, and sustainability. In the research, it was modelled that an approach towards stakeholder orientation is more likely to address broader aspects of problems that relate to all the stakeholders as opposed to market orientation approach that only focuses on competitors and customers (Ferrell et al., 2010). A stakeholder assessment from the study has indicated that there is a higher likelihood of all stakeholders affecting the customer’s preferences and buying habits as compared to market orientation. There has however been an indication from other studies that the market orientation constitutes more stakeholders than the ones indicated in this study (Lambin and Schuiling, 2012). For this reason, further studies need to be done in this area to confirm this study.
In conclusion, this study has managed to outline, through a literature review, how marketing has been used effectively as an organizational strategy in market-driven organizations. The study has been able to establish that marketing can help obtain key information about stakeholders by interacting with them in market orientation. The study has further shown that organizations can use the information collected on stakeholders through marketing research to take appropriate measures in order to participate competitively in the market or even be ahead of competitors. In addition marketing, through marketing research can help build a strong customer relationship. It has however been observed that a market orientation setting is likely to pose a challenge to marketing and to the firm in general and hence the need for firms to be vigilant.
- Ferrell, O., Gonzalez-Padron, T., Hult, G. and Maignan, I. (2010). From Market Orientation to Stakeholder Orientation. Journal of Public Policy & Marketing, 29(1), pp.94-95.
- Javalgi, R., Martin, C. and Young, R. (2006). Marketing research, market orientation and customer relationship management: a framework and implications for service providers. Journal of Services Marketing, 20(1), pp.12-23.
- Kumar, V., Jones, E., Venkatesan, R. and Leone, R. (2011). Is Market Orientation a Source of Sustainable Competitive Advantage or Simply the Cost of Competing?. Journal of Marketing, 75, pp.17-28.
- Lambin, J. and Schuiling, I. (2012). Market-driven management. Basingstoke: Palgrave Macmillan, pp.29-40.
- Ngo, L. and O’Cass, A. (2012). Performance implications of market orientation, marketing resources, and marketing capabilities. Journal of Marketing Management, 28(1-2), pp.178-185.