MARKET ORIENTATION: AN INTERDISCIPLINARY AND COMPLEX

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Key wards: market orientation, marketing concept, interdisciplinary approach ... organization to environment in which operates and ensures long-term profitability. ... de Mesa created a complex approach framework to analyse the concept, thus:.
MARKET ORIENTATION: AN INTERDISCIPLINARY AND COMPLEX CONCEPT Pandelică Amalia University of Piesti, Faculty of Economic Science, [email protected] Pandelică IonuĠ University of Pitesti, Faculty of Economic Science, [email protected] Negulescu Cristian University of Pitesti, Faculty of Economic Science From ’90s many researchers was interested in a new concept: market orientation. First academics, which studied this concept was Kohli and Jaworski (1990), Narver and Slater (1990). Beginning whit their theories, many others academics and practitioners show a growing interest for this concept and for how the implementation of this concept can improve the performance. Marketing literature contains many definitions of the concept some of them being divergent concerning whit what is market orientation and how could be implemented in the organization. This proves the complexity of the market orientation concept. Beginning from the most important researches from the field, through this article, we propose to emphasis the most important element that show the interdisciplinary and complexity of the concept. Key wards: market orientation, marketing concept, interdisciplinary approach Marketing and management researchers pointed out, beginning whit ’90s, the benefits of implementation of a new business philosophy – market orientation. The concept was the topic for many researches from different economic fields, like as: marketing (Nerver and Slater, 1990), strategic management (Piercy, 1997), marketing management (Dozle and Wong, 1998), human resources strategic management (Atuahene- Gima, 1996), organizational culture (Harris and Ogbonna, 1999) and public sector (Stokes, 2002). Even if, the concept has an interdisciplinary approach, all academics and managers started from the same point – market orientation is a business philosophy, which connects all the functional areas of the organization to environment in which operates and ensures long-term profitability. Market orientation was defined in many ways, thus: 1.” We use market orientation for emphasize the implementation of marketing concept whitin the organization” (Kholi and Jaworski, 1990). 2. “Market orientation is a business philosophy which finally ensures superior value creation for the customer” (Narver and Slater,1990). 3. „We can say that a firm is market orientated when firm’s culture is governed by values which systematic ensure superior value creation for customer. Practically, this mean gathering the information about customers and competitors and using this information for building superior value for the customers” ( S.Slater, 1994). 4. Market orientation is a source of building competitive advantage. If in the past it was considered that competitive advantage is the result of a higher power on the market, economy of scale or the diversity of products range, today it is considered that building and delivering superior value is the key of obtaining competitive advantage. Slater, through his researches, demonstrated that firms which have market orientate culture better manage to build and deliver superior value to the customers. 5. The newest approach of the concept refers to the market orientation from value chain point (Baker, 1999, Grunert, 2002, Simpson, 2001). Market orientation degree of one member from the chain could affect market orientation degree of the others members of the chain. The competitiveness of the entire chain in serving the customers depends on implication of all chain’s members in gathering the information about consumers needs and uses this information for building superior value. 1055

6. In 1996, Tuominen and Moller, pointed out the necessity of an interdisciplinary approach to emphasis the complexity of the concept. They consider that there are many directions in approaching the market orientation, thus: market orientation as a business philosophy, market orientation as inter-functional coordination, market orientation as gathering the information about consumers and competitors and dissemination of the information to all functional areas, market orientation as source of organizational learning. 8. Quintana and Beeril (2001) and Hernandez (2002) emphasised that there are five directions in approaching the concept, thus: as business philosophy, as management process concerning whit the market information, as inter-functional coordination referring to dissemination of market information to all departments from the organization, as an organizational learning source and as a competitive strategy. 9. An extensive definition of the concept was developed by Lado (1998) who considers market orientation as a „competitive strategy that involves all functional areas and levels of the organization and embraces the different market participants”. 10. Because market orientation concept has been defined as an orientation of whole organization to meet consumers’ needs it could be considered as an antecedent of the paradigm of relational marketing. This is sustained by the definition of relational marketing developed by Reinares and Ponzoa (2004) who consider relational marketing as „different actions and initiatives developed by a business towards different agents (consumers, clients, distribution, shareholders, employees or others), or toward a determined group or segment of it, focused on obtaining their satisfaction by offering products and services adjusted to their needs and expectation, including the creation of stable relational channels, created for exchanging communication and value added.....” 11. Reinares Lara and Gutierrez de Mesa created a complex approach framework to analyse the concept, thus: Different approaches

Characteristics

Market orientation as business philosophy

Market orientation is a business philosophy, which generate behaviours and actions. At the same time, this philosophy is a set of abilities and practices which transform this philosophy into strategies and effective behaviours within the organization

Market orientation from marketing point

This orientation refers to gathering of information about needs and desires of the consumers and about the evolution of the others factors of the environment. The information will be disseminated to all departments within the organization. Adaptation of all functional areas from the organization for meeting the consumer needs and for obtaining consumers loyalty.

Inter-functional coordination of information

Market orientation has five dimensions from this point of view: Customer orientation Competitors orientation Inter-functional coordination Long-term orientation Emphasising the benefits

Managerial approach

The managerial approach points out five dimensions: Organization that contemplates the definition of the structure and its processes The information system, which refers to gathering 1056

the information, the dissemination of information in the organization and storage of the information. Planning of the environment and its alternatives Control of the external and internal elements and the analysis and control of the deviations among the results obtained and planned. Human resources management by objectives. Resources and capacities approach

Market orientation improves some higher capacities to understand and satisfy clients, thus: Creation of superior value for customers Gathering information and its dissemination among the assembly of agents related to the business: clients, competitors, suppliers Give priority to response to change in the consumer needs and in the activities of competitors, taking advantage of opportunities and avoiding threats

The relationship between market orientation and marketing concept Because our purpose is to emphasise the complexity of the concept, we will try to explain the relationship between market orientation and marketing concept. All approaches of market orientation presented in this article show that some researchers consider market orientation the result of implementation of marketing concept within the organization. So, from this point of view market orientation is a popular term used by marketing practitioners as an indicator of the extent to which a firm implements marketing concept. „A market oriented firm is presumed to have a superior market-sense and consumer-linking capabilities, and these capabilities are presumed to assure them higher profits in comparison with firms that are less market-oriented”(Pedro Reinares Lara and Emma Gutierrez de Mesa Vasquez, 2004). Marketing concept, considered the basement of modern marketing, show that a firm obtains log-term profitability if identifies consumers needs and satisfies them better then competitors. The advocates of marketing concept argued concerning whit the purpose of market concept – to obtain a satisfied consumer. In the last decades, consider R. A. Heiens, marketing concept was just a controversial topic then a practice for managers. Beginning from the theory of marketing concept, researchers developed the theory of market orientation. As Kohli and Jawroski (1990) demonstrated, marketing concept is a business philosophy, while market orientation refers to implementation to this concept within the organization. An important part of market orientation literature is dedicated to study the degree of implementation of marketing concept. According whit marketing concept the most important element of market orientation is customer orientation. Even if, academics emphasis the importance of consumer orientation, in firms practice managers tend to focus their attention on competitors, so they are competitors oriented. This divergent focusing between academics and managers shows the luck of consensus concerning whit what are the components of market orientation and the importance degree of each component. On the other hand, some researchers consider that market orientation concept is broader then consumer orientation and includes some external factors which play an important part in shaping the consumers needs, for instance, the competitors or the government regulations. Conforming whit this opinions, market orientation implies whole organization while marketing concept refers mostly to marketing activities and to marketing department. From this analyze we can figure that market orientation is a complex concept which can be successful implement within the organization only if the organization operate compliance marketing concept. Also, 1057

we can figure that an organization which operates compliance whit marketing concept is not necessary market oriented. “In reality, no firms are 100% market orientated. Indeed, the theories on market orientation are idealistic and even then not without flaws (K. Gotthelf, 2005). We are not necessary agree whit the affirmation that market orientation theory is idealistic because many researches demonstrate the importance of market orientation for the long-term profitability and success, but we are agree that the analyzing of this concept don’t have to be “or-or” type. This mean that the firms aren’t only to types: market oriented and others. We consider that firms have different degrees of implementation of market orientation concept. R. A. Heiens (2005) from University of Sought Carolina Aiken, developed a market orientation typology matrix to emphasis that firms can decide to focus primarily on either competitors or consumers. The proposed matrix includes four different approaches (degrees) to market orientation: customer focussed, marketing warriors, strategically integrated and strategically inept. Firms which put the consumer first are considered “consumer preoccupied”. As we said, marketing concept promotes putting the interests of consumers first and because of this, consumer orientation is considered the most important element of market orientation. Firms which are consumer focus are interested in longterm business success and are not focus on short-term profits. As we said, if academics consider consumer orientation the most important element of market orientation, managers are usually competitors oriented. Firms that focus on competitors in their markets analyses are considered “marketing warriors”. First, these “warriors” identify the target rivals, second they identify their own strengths and weaknesses and finally decide if will keep pace or will stay ahead of the rest of the field. Heiens uses “strategically integrated” term for firms which are focus to the collection, dissemination, and use of both customer and competitor intelligence. In many researches is suggested that the key of success is a balance between the two perspectives, “and firms should seek to remain sufficiently flexible to shift resources between consumer and competitor emphasis as market condition change in short run” “Strategically inept” is used for firms which fail to orient their strategic decision making to the market environment. Even if this matrix clarifies that market orientation has different degrees, it is limited because takes to account only two element of market orientation – consumer and competitor orientation.

Conclusions: Finally, we can figure that market orientation is a complex and interdisciplinary concept. This concept has different approaches, thus: 1. as business philosophy, 2. as organizational culture, 3. as an organizational behaviour, 4. as a set of effective activities which implies – gathering market information, dissemination to this information to all functional areas within the organization and developing actions using market information; 5. as a practice which focuses activities within organization in three directions: consumers orientation, competitors orientation and inter-departmental coordination, 6. as a business practice which generates long-term profitability and success on the market; 7. as a process of implementation of marketing concept within the organization. The implementation of this concept within the organization is a long and complex process which refers to all functional areas and all employees, and implies organizational culture change. Through this process the organization is connected to markets in which it operates and become more flexible developing the capacity of adaptation of the environmental changes. Managers from market-orientated firms have long-term vision about business and are managing through inter-departmental teems. They have to establish a hierarchy of values within the organization, and place the consumer in the top of the hierarchy. They have to motivate the employees to determine them to put consumer first and to organize activities within the organization whit the purpose to explain to employees the importance of customer. 1058

The implementation of market orientation takes time because organizational culture change is a long-term process and the implementation’s success depends on the support of entire organization (all departments and all employees). Market orientation is a concept which can be implemented by any type of firm – no matter the size or the industry in which organization operates.

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