How important is a market orientation in the digital age?

Introduction

This Essay evaluates how important market orientation is in the age of information. The Internet und current as well as new emerging technologies (like social networks) have changed the way marketing works. Researchers and resources discuss how to market products using emerging technologies but they miss to discuss how to apply a market orientation. I believe researchers are one step too far. Marketers should start using emerging technologies already while developing products. My research revealed that the majority of marketers are still experimenting on how to integrate emerging technologies into marketing and actually benefit from it. I believe the reason for this is that they start using emerging technologies too late. This essay will evaluate my thesis and explain at the end how important market orientation is in connection to emerging technologies. In the next section I will explain the term ‘market orientation’ and describe the original idea behind it as well as the construct to implement market orientation. The third section will connect facts from today’s digital marketing to the construct of market orientation to be able to evaluate how important market orientation. This this has never been done before. The last section will discuss how important market orientation is.

Construct of market orientation

The literature review has revealed that the construct ‘market orientation’ lacks a clear definition. Most of the researchers created their own definitions. However, all these definitions have parts in common and have the same meaning. Kohli and Jaworski explain the market orientation as the ‘implementation of the marketing concept’ (1990). Narvan & Slater aim in the same direction and describe market orientation as ‘the very heart of modern marketing management and strategy’ (1990). Many other definitions exist (Felton 1959, McNamara 1972, Lavidge 1966, Levitt 1969, Konopa and Calabro 1971, Bell and Emory 1971, and Stampfl 1978). These definitions describe the term ‘market orientation’ only in a very abstract way. Kohli and Jaworski describe in more detail what is connected to market orientation. Their description is similar to most of the other descriptions that exist. Three pillars are important for a market orientation: customer focus, coordinated marketing, profitability (Kohli and Jaworski 1990, Narvan and Slater 1990, Erdil et al. 2004, Brassington & Pettitt 2011). This means, market orientation involves one or more departments to understand what the customer wants at the moment and in the future and what factors affect this. Afterwards various departments engage in designing activities to meet these customer needs (Kohli and Jaworski 1990). With this information it is now possible to explain the construct of market information. The basic construct consists of three stages: intelligence generation, intelligence dissemination and responsiveness (Erdil et al. 2004, Heiens 2000). Intelligence generation is the starting point and aims to find out what the customers want and their preferences as well as the factors that influence those wants and preferences (Erdil et al. 2004). One important step at this stage includes the monitoring of competitor actions to be able to react to changing customer needs (Erdil et al. 2004). The next step is intelligence dissemination and involves not only the marketing department. The goal of this stage is to design actions on a shared basis of information by different apartments to meet the customer needs (Erdil et al. 2004). The last step is responsiveness and coordinates intelligence generation and dissemination to respond to market needs (Erdil et al. 2004). Steps undertaken in this stage are: selecting target markets, designing and offering products/services, and producing, distributing and promoting the product (Erdil et al. 2004). The consequences of a market orientation are controversial. Many researchers say it ‘facilitates clarity of focus and vision in an organisations’ strategy, enhances the performance of an organisation, and leads to greater customer satisfaction (Erdil et al. 2004, Kolhi and Jaworski 1993). In the following section I will describe if the construct described in this section is still valid today and if companies can expect the same consequences.

Implementing emerging technologies in the concept of market orientation

In this section I will relate activities from digital marketing to the three stages of market orientation, starting with intelligence generation. Today, consumers continually interact with companies and it is not easy for companies to coordinate content across the entire consumer experience (Edelman 2010). Consumers also tend to pull information on demand (e.g. on Facebook). This provides chances but also risks for companies. When interacting with consumers in a digital world companies are able to interact with consumers in a new manner, increase access to data and insights and reach new customers (Survey 2011). But as easy as information can be gathered the same technologies can spread negative information (Edelman 2010). According to Edelman with digital marketing companies can spend significantly less by making the right investments with no decrease in performance (Edelman 2010). The most important step is to coordinate the consumer’s end-to-end experience which contains a series of steps: capture Internet traffic, increase consumer engagement, capture qualified leads, and build consumer loyalty (Edelman 2010). Recognition of consumers by the companies allows the company to perceive real values (Zeisser 2010). I believe this allows better consumer insights which help the intelligence generation process. As another benefit it also helps the virtual word-of-mouth process (Zeisser 2010). However, companies need to design a consumer-engagement strategy to find out how people interact with the company online (French 2011). I believe this is the key for intelligence generation. The interaction can be with the product itself or with the service, sales, marketing or any other department (French 2011). Companies need to build a social-media infrastructure and become publishers (Edelman 2010). By doing this they can improve the process efficiency of content creation, reuse content for higher return assets (e.g. intelligence dissemination), and expand return on investment by optimising customer experience (Edelman 2010).

The next section will relate activities from digital marketing to the stage of intelligence dissemination. I believe the major obstacle to overcome at this stage is organisational rather than conceptual. The marketing department can’t do everything that is needed on its own (French 2011). Analysing the right information in the right way is important at this stage. This requires smart investments in data tools, a group of skilled analysts, and flexible processes that can facilitate rapid action (Edelman 2010). But there are also many constraints, like on funding and resources or a lack of proper infrastructure and IT tools (Survey 2011). This often leads to marketing decisions which are made with internal sales data (Survey 2011). This won’t help creating new consumer insights for the market orientation. Company’s need a clear approach for monitoring touch points and renew them as needed (French 2011). With the speed of information today I believe this is essential to stay competitive. To make the analysis at this stage useful companies need to analyse what consumers are seeing, doing and saying (Edelman 2010). As a last step they need to prioritise what to measure and what to integrate in the evaluation process for the customer needs. To summarise the intelligence dissemination stage, marketing and technology functions need to work together more closely to support information-intensive marketing operations (Edelman 2010).

At last the stage of responsiveness needs to be connected to digital marketing. According to Edelman companies that make deep strategic, organisational and operational shifts are able to become more agile, more productive and accelerate revenue growth (Edelman 2010). I believe it is applicable to market orientation. But companies need to focus on four steps at this stage (Edelman 2010). First, the need to coordinate customer engagement throughout the digital purchase journey. Second, the need to serve as a brand ambassador. Third, the need to manage the increase in the content they create to support products, segments, channels and promotions. Fourth, strategy how to gather and use the plethora of data.

After explaining a basic framework on how to integrate emerging technologies into market orientation, the next section will discuss how important a market orientation is, if the framework of this section is applied.

Discussion

I believe having a market orientation today is more important than ever. In this section I will explain why, through explaining if the three pillars of market orientation (customer focus, coordinated marketing and profitability) can be achieved. Only if these three pillars can be achieved a market orientation can be seen as important for marketing with emerging technologies.

Table 1 shows the challenges of emerging technologies and the pillars of market orientation. With this table it is possible to see how the pillars of market orientation can help to overcome the challenges of emerging technologies. Therefore the challenges of emerging technologies got associated to the area of market orientation where they need to be assessed. It gets clear that all the pillars are still very helpful today. This is the reason, why having a market orientation is still very important. The concept of market orientation can help to stay focused and decrease the level of confusion in the area of marketing with emerging technologies. By connecting the concept of market orientation to marketing with emerging technologies companies can achieve competitive advantages, find new customer segments and develop new business models. At last, I believe that companies that use this approach can expect the same consequences of market orientation described in section 2.

Table 1 – Challenges of emerging technologies

challenges of emerging technologies pillars of market orientation
produce and use consumer insights

customer focus

recognition by peers
data-driven consumer insights (analytical challenges)
monitor what customers see, do, say
coordinate consumer’s end-to-end experience

coordinated marketing

manage virtual word-of-mouth
marketing can’t do everything on its own
monitor touch points
technology and marketing functions need to work more closely together
become a publisher
online conversations start to trash your brand

profitability

prioritise what to measure
requirement to become effective digital marketers

Marketing with emerging technologies has effects on all three stages explained in the previous section. Generating customer insights, reaching new customer segments and business models is more challenging today (French 2011, Survey 2011). But companies should not ignore this type of marketing. An effective online presence is very important to stay competitive (Survey 2011). More important is the fact, that the Internet has a great potential to acquire, share and disseminate information if companies use the right analysis to process this information (Schwartz and Te’eni 2000, Survey 2011). Many companies agree that their online presence is important and provides opportunities yet few take structural steps to benefit from emerging technologies (Survey 2011). Many are still experimenting and trying different approaches (French 2011, Survey 2011, Shenkan and Sichel 2005). I believe the reason for this is the wrong starting point. Most of the companies use emerging technologies to market their products (Edelman 2010); but they are not implemented in the marketing process, starting with the market orientation. I believe this is the reason for so much confusion in this field and the reason for companies to lose focus. Companies have to move from a one-way process to a two-way relationship (Edelman 2010). But this requires core changes in the way marketers work (Edelman 2010).

Conclusion

The idea of connecting the concepts of digital marketing using emerging technologies with the concept of marketing orientation is new. Given the confusion among marketers how to use emerging technologies in the marketing process it might provide new ideas and concepts that can help companies from stopping experimenting to start benefiting from emerging technologies. However this idea needs further investigation and field studies to get reliable results. This essay pointed out that having a market orientation is still very important for companies, in my opinion even more important to stay competitive today. But it needs to be applied in the right way, with the right processes and the right analysis.

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