Market Orientation – The essential foundation for strong brands

Market orientation - The essential foundation for strong brands

Apple Computers, Starbucks Coffee, Virgin Group, L’Oreal, Louis Vuitton, Nike, Singapore Airlines, Banyan Tree and Samsung are among some of the most successful brands in the world. Much has been written about the power of their brands that has allowed them to dominate their respective industries not only in the domestic markets but also globally. Most if not all accounts of success of such brands have emphasized on the branding process, the systems of brand management and the role of the brand equity in enhancing the company’s overall profile. The dynamics and the cultural aspect that are the powerful underlying forces behind these brands are rarely talked about.

In today’s hyper competitive global markets, success depends more on the overall vision and philosophy of the companies that drives their activities rather than on their product level or business unit level strategies. The role of brand equity in a company’s market capitalization and shareholder value maximization is well documented. But to achieve such strong brand equity, companies need to develop a culture and an orientation that not only supports market oriented thinking but also nurtures the integration of cross functional integration of thought and activities. This article takes a detailed look into the components of such an orientation and what makes a company’s internal structure conducive to building strong brands.

Market orientation

Market orientation is usually defined as the organization wide generation, dissemination, and responsiveness to market intelligence. This definition at once changes the dominant paradigm that has defined marketing for decades. Marketing has traditionally been defined within the narrow confines of the 4P framework. Such a conceptualization of marketing has relegated marketing to a tactical discipline to be performed by middle level marketing managers who did not possess the overall holistic view of the organization. But the connected knowledge economy, globalizing, converging and consolidating industries, fragmenting and frictionless markets, empowered customers and adaptive organizations among others are forcing organizations to alter their view of marketing.

The concept of market orientation is built on three pillars of customer focus, coordinated marketing and profitability. An organization’s capabilities to develop an orientation towards each of these three pillars depend on the internal structure and culture. The next section further elaborates these three constructs and how they allow companies to create a strong internal culture that can support building brands.

Pillars of market orientation

Customer focus: Organizations have traditionally emphasized either profitability or market share (growth) as their guiding orientations. As the fundamental responsibility of any organization is to maximize shareholder value, such an orientation did not seem wrong. Further, with the advent of branded goods, globalization and increasing competition, companies placed a very high emphasis on products. But all these extant orientations have been challenged with the explosion of the Internet and resulting empowerment of customers. Internet to a great extent reversed the information asymmetry and allowed access to hitherto unavailable information about product features, price and peer recommendation. These factors are forcing companies to shift their fundamental orientation from that of profitability, growth and products to customers.

Customer centricity is at the center of creating any future corporate strategies. Customer centricity primarily proposes that the basic philosophy of companies should be to serve customers rather than sell products and in the course establish long-term relationships by treating customer as strategic assets.

Coordinated Marketing: For a company to have a market orientation, marketing has to break the narrow confines of the tactical 4P framework. Marketing should be transformed into a company-wide discipline practiced by anyone and everyone. Simply, marketing has to become a coordinated, cross-disciplinary function. This is easier said that done.

For any discipline to claim a much broader responsibility and scope beyond its functional domain, the ability to quantitatively measure the outcomes of its activities becomes paramount. This is where marketing has been suffering for a long time. Measuring marketing productivity has indeed become a major challenge for marketers. But further, marketers have refused to acknowledge that customers are not the sole responsibility of the marketing department but of the company as a whole. These factors have together stalled marketing from becoming a coordinated activity that involves other functions such as finance, operations, human resources and strategy within any company.

Profitability: In today’s global capital economy, the future potential of the company and its potential attractiveness is often controlled by the capital markets. Companies and managers are constantly under immense pressure to demonstrate the financial strength every quarter. The effect of quarterly results on the company’s stock price, the signals that such results have come to convey to a wide array of stakeholders and the extent to which financial analysts have managed to unleash havoc and terror for companies have collectively forced companies to adopt a very short-term perspective on profitability.

Further, the focus on short term profitability invariably comes at a very high cost. Most companies tend to ignore the impact of their actions on the long term strategic capabilities. Moreover, under the traditional marketing paradigms, short-term focus was inevitable as the emphasis was on products rather than on customers. But within the framework of market orientation, profitability encompasses both financial measures (such as ROI, EVA, and market share) and non financial measures (such as awareness, attitudes and behavioral patterns). Such a comprehensive measurement would allow companies to balance between short term and long term profitability with a cautious eye on long term financial health of the company.

These three pillars of market orientation have proven to allow companies to create a very strong philosophy and in turn contribute to companies’ long term strategic competence. But having followed the traditional marketing model for decades, it is indeed a tough call for companies to become market oriented. The following section of the article offers guidelines on how companies can establish a structure that allows management and employees to inculcate new way of thinking about marketing and ultimately channeling the aggregate mentality towards a market orientation.

Guidelines to adopt a market orientation

Leverage customer database systems: One of the greatest advantages that companies have today is the power of customer databases. The explosion of internet and the possibility of recording very specific details about customers, their online movement and their purchase behavior have only added power to these databases. The first step for companies in moving towards market orientation is to optimally leverage these databases.

The potential marketing intelligence that these databases offer would allow companies to understand the customers’ current and potential needs clearly. Such an understanding would lead to marketing functions to be in line with customers’ needs rather than compulsions centered around products. As such, pricing will be in line with customer’s willingness to pay rather than to cover costs, advertising and communications will inform, appeal and endear to customers, customer’s convenience will dictate distribution rather than logistical ease and product features would essentially reflect customers’ unmet needs rather than show off the latest technological supremacy. Such a shift from product centricity to customer centricity will be an important first step.

Create a marketing dashboard: To achieve complete market orientation, companies should create a systematic structure that would enable different functions to collectively discuss about customers and markets.

Traditionally, marketing department handles customers and their needs, finance looks after the money, operations is singly focused on production and strategy generally looks at the market outside to decide on the company’s future. A market orientation mandates that all these functions operate jointly. Marketing dashboards create a platform whereby representatives from each of these departments can come together and discuss the various functional issues so that the collective action will result in activities that enhances the company’s relationships with customers. Further, for marketing to become an organization wide discipline, it must not only understand the different functions within a company but also should be able to relate marketing activities to other functional activities. Marketing dashboards provides marketers a structured platform to ensure marketing become coordinated and company wide.

Constantly update metrics: Metrics used to measure the outcomes of marketing activities cannot be generalized across companies. Rather, they have to be modified and adopted depending on the company, the product class, the industry, the important criteria being measured and the ability of the company to track marketing investments. A first step in recognizing and developing useful metrics would be a collaborative discussion with other functional departments within the company. Further, the corporate mission and underlying philosophy would offer some insights into what metric are regularly tracked such as quarterly market share, relative share within the category, brand awareness, conversion ration through the purchase funnel, shifts in attitudes in response to advertising campaigns, shift in purchase patterns in response to discounts/promotions and so on.

But caution should be taken to ensure that these metrics capture both financial and non-financial measures. Marketing should also strive for developing metrics that go beyond the discipline and are able to capture the outcomes of all activities that bear on the relationship with customers. Such a move would take marketing a step closer to becoming an organization wide discipline.


Brand equity is undoubtedly the most important of corporate assets. To create strong brands, as important as a structured brand management process is a strong guiding philosophy that is customer and market oriented. Such an orientation spawns a self-enriching culture that not only drives the company in the right direction but also facilitates the creation of a strong corporate strategy. As such, companies would benefit tremendously by shifting from a complete product or growth orientation to a market orientation. Such market orientation after all is the basis for building strong brands.