Market Orientation

A company strategy that puts the wants and preferences of customers first

Author: Manu Lakshmanan
Manu Lakshmanan
Manu Lakshmanan
Management Consulting | Strategy & Operations

Prior to accepting a position as the Director of Operations Strategy at DJO Global, Manu was a management consultant with McKinsey & Company in Houston. He served clients, including presenting directly to C-level executives, in digital, strategy, M&A, and operations projects.

Manu holds a PHD in Biomedical Engineering from Duke University and a BA in Physics from Cornell University.

Reviewed By: Elliot Meade
Elliot Meade
Elliot Meade
Private Equity | Investment Banking

Elliot currently works as a Private Equity Associate at Greenridge Investment Partners, a middle market fund based in Austin, TX. He was previously an Analyst in Piper Jaffray's Leveraged Finance group, working across all industry verticals on LBOs, acquisition financings, refinancings, and recapitalizations. Prior to Piper Jaffray, he spent 2 years at Citi in the Leveraged Finance Credit Portfolio group focused on origination and ongoing credit monitoring of outstanding loans and was also a member of the Columbia recruiting committee for the Investment Banking Division for incoming summer and full-time analysts.

Elliot has a Bachelor of Arts in Business Management from Columbia University.

Last Updated:October 4, 2023

What Is Market Orientation?

Market orientation is a company strategy that puts the wants and preferences of customers first and develops goods and services to satisfy them.

Market-oriented businesses consider the demands and opinions of the target market to be a crucial component of product development and research.

Although it might seem straightforward, proponents of the market-oriented approach contend that the conventional method of product creation is the opposite.

It is the reverse of previous marketing tactics called "product orientation," which emphasized creating places of sale for already-existing products.

To put it in another way, marketing plans emphasize creating focal points to highlight already-released goods than they do building features that customers would want. 

By adding features that can serve as significant selling factors, businesses emphasize their existing items in the conventional method.

Lack of innovation is the main problem with a market-oriented strategy. You can miss out on possible technological advances if your whole time is spent satisfying client wants.

The opposite is true for product-oriented businesses, which tend to be more innovative in science or technology but fail because they don't fully understand what customers want.

Key Takeaways

  • Market-oriented companies prioritize customer preferences and demands when creating goods and services, emphasizing customer satisfaction as a driving factor.
  • The market-oriented approach contrasts with "product orientation," where the emphasis is on existing products, and "sales orientation," which aggressively pushes products without considering customer needs.
  • Market-oriented businesses risk missing out on innovation by solely focusing on customer demands, while product-oriented ones may innovate but fail to understand customer preferences.
  • Amazon and Nike demonstrate market orientation by anticipating customer desires, offering free shipping, and creating products aligned with specific target markets for customer satisfaction.
  • Market orientation involves market research, segmentation, targeting, and positioning to tailor products to customer needs, leading to a competitive edge in a globalized economy.

How Does Market Orientation Work?

Market orientation is more of a product design method than a strategy for advertising. 

An approach to product design known as "market orientation" puts the client first. It entails conducting market research to identify:

  • Consumers' current needs
  • Key concerns
  • Personal preferences for a specific product category

Businesses may also use additional data analysis to identify emerging trends and customer needs. 

Product makers can better satisfy and predict consumer wants by being aware of these trends. They might even motivate customers who are unaware they have a choice to improve.

A corporation focused on the market needs to concentrate its Strategy on its customer base's values, culture, and other behavioral traits. 

A company's development efforts are therefore concentrated on the most in-demand features. Enterprises that adapt to market orientation may gain a competitive edge over other companies as the economy becomes more globalized and customer choice expands.

Customers should be the company's primary focus, so it should pay close attention to their demands and wants. The following are required to attain the client focus.

  • Market research
  • Segmentation
  • Targeting
  • Positioning

Market research

Gathering and evaluating data on the target market is the process of conducting market research. For example, the market can be divided into divisions, and the most lucrative segments can be found with the company's position in the target market using this data.


Divide the target market into more manageable, smaller groupings through market segmentation. Demographics, psychological data, and behavioral traits are a few examples of the many variables that can be used to determine this.


After the market has been divided into segments, the company must choose which part will be its target market. 

The size of the market segment, its profitability, and the company's ability to reach that market segment are just a few of the variables that should be considered when choosing a target market.


Positioning is the process of giving the company in the target market a distinctive and differentiating image. The target market's demands and preferences should be the foundation of this image, and it should surpass the competitors in satisfying those needs.

Examples of market orientation

Market orientation is a business philosophy that emphasizes the importance of continuously adapting to evolving market conditions and customer preferences.

It's about perceiving market trends, discerning customer requirements, and then aligning business strategies accordingly.

  1. Companies like Amazon strive to build their operations around the fact that most customers don't appreciate having to pay for shipping and already anticipate what their customers will desire. They, therefore, provide a selection of delivery methods that are either free or need a minimal fee.
  2. The world is familiar with Nike. It adopts a market-oriented strategy and meets clients' needs by focusing on a specific target market. 

Customer satisfaction is 100% due to high quality and exceptional value. It has come to understand that achieving success is simple if you pay close attention to particular consumer needs.

Market Orientation Types

Market Orientation strategy prioritizes understanding and meeting the needs and preferences of customers, often anticipating them before they're even expressed.

Marketing orientation goes beyond just selling products; it's about creating value for the consumer, forging strong relationships, and ensuring long-term customer loyalty.

Whether you're a budding marketer, a business owner, or simply curious about the mechanics of the market, this discussion aims to enhance your comprehension of how putting the customer first can reshape business trajectories.

Various forms of marketing orientation, in addition to market-oriented techniques, include the following:

Sales orientation

Sales orientation is a technique a business uses to convince clients to acquire its goods and services. 

Without considering the demands of their customers, these businesses gain money by luring customers to purchase their goods. This method typically relies on aggressive marketing and outside sales tactics to increase sales.

Sales-driven businesses disregard other facets of product marketing, such as market and product research, to comprehend consumer wants.


A business makes an effort to sell its customers a variety of goods. It can be a company operating online attempting to sell software to clients, or it might be another company whose clients are unaware that they require it. 

Assuming that their items satisfy consumers' or enterprises' demands, these businesses produce them.

Therefore, these businesses first develop their products before going out and interacting with the public to explain their advantages and encourage purchases.

Production orientation

This positioning assumes that consumers will favor the most easily accessible and affordable products and that a focus on efficiency in production and distribution will best achieve the company's goals. 

It places more emphasis on production techniques and management philosophies that lower unit costs than on the needs and requirements of the target market.

They don't give much thought to the wants and needs of their clients. Instead, they think that if they create:

  • A high-quality
  • Effective
  • Functional product

Consumers will buy it whether or not it suits their tastes.


A prime example of a production-oriented organization is Henry Ford's Model T automobile. They take little time to construct, are simple to operate, and cost nothing. 

The Model T cost $825 when it first went on sale. Its cost had gotten down to $360 in a decade. Half of all automobiles in America were Model Ts at their height of manufacture.

Since black paint dries quicker than other colors, every Model T built on the production line was black. Thus, Henry Ford's famous statement that "any customer can have his car painted any color he likes, as long as it's black" came to be.

Product Orientation

Sometimes individuals mistakenly believe that the production-oriented Strategy and the product-oriented approach are similar. 

However, this is not the case. Instead, this company's Strategy is centered on its products, which it works to continuously enhance and perfect to keep them ahead of those of its rivals. 

Therefore, production-oriented is quality-centered, and price-oriented is price-centered, which tends to increase prices.


Apple, known for conceiving items before customers even realize they want them, excels at this skill. Regarding goods like the iPod, iPhone, and iPad, Apple depends on quality and innovation to break into new markets and generate demand.

Societal orientation

According to the theory behind social marketing, businesses ought to make wise marketing choices by taking into account the demands of consumers, their needs as well as the needs of their companies, and the long-term interests of society.

Sales are boosted through social marketing, which creates a favorable impression of a business. However, in contrast to social media marketing, it is distinct. On the other hand, it is a phrase directly tied to sustainable development and corporate social responsibility.

It highlights and encourages upholding social responsibility. Furthermore, it calls for environmentally sound, socially conscious, and sustainable marketing that satisfies present-day consumer and company demands and preserves or improves the capacity of future generations to meet their own needs.


One of the leading global manufacturers of athletic apparel is Adidas. Adidas has committed to creating products that can be recycled time and time again to protect the environment.

AdvantagesOf A Market-Oriented Strategy

The advantages Market-Oriented Strategy are:

For a business, a market-oriented strategy has many advantages. These are some of the principal benefits.

1) Most consumers are also aware of current market trends and are very clear about their wants and demands. 

2) Analyzing data, though, can show hazy trends and goals. It can aid in predicting consumer requirements and transform market-oriented businesses into ones that actively influence consumer behavior instead of merely responding to it.

Though the demands of consumers frequently seem exaggerated, their information can be pretty useful for making long-term choices. If market conditions alter in the future, ideas that are not now economical can still be used. 

3) Due to changes in:

  • Technical
  • Scientific
  • Legal
  • Or other market circumstances

Options that are not currently cost-effective may become very feasible.

4) Data gathered during the product development process can be utilized to improve customer support when the product is released. 

Customers may believe that a firm takes them more seriously and values them more when it alters its offerings, procedures, or policies in response to their requirements. 

Customers are more inclined to choose a brand over the competition if they feel that the company treats them properly and tries to meet their demands.

5) A high level of customer satisfaction depends on good product support that addresses customer issues. It encourages acquiring new clients, consumer adherence to the brand, and word-of-mouth advertising to current clients.

6) A brand's market success and the number of new customers it attracts can be influenced by its brand image. Companies can enhance their brand image by putting their full attention on customer needs. 

The trust that customers have in a firm and its products may rise due to a strong brand image, which may also increase traffic to a company's website or physical location.

Disadvantages Of A Market-Oriented Strategy

Market-oriented Strategy has numerous benefits for an organization but has certain drawbacks. The following are a few significant drawbacks.

1) Reacting to market trends rather than establishing them is the foundation of market orientation. Thus, a company's ability to innovate may be limited if it focuses too much on the demands and aspirations of its customers.

2) A market-driven approach cannot ensure a sizable market share on its own because rivals serving the exact consumer requirements may soon enter the market.

3) Due to the fluid and changing nature of consumer preferences, market orientation drives businesses to be more adaptable. 

They must be able to change with the dynamics of the market and the consumer base. They won't make a profit over the long run if they don't since they will lose customers.

Market Orientation FAQs

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