# Market Orientation: Consumer-Centric Strategies Explained

![Market Orientation](https://www.investopedia.com/thmb/vDe8gLaYzmEBrsy0ma7iSYUO2Gc=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/market-orientation.asp-final-dff1c3d263a242a7996bd5ccc788f864.png)

*— Investopedia / Paige McLaughlin*

> **Definition**
>
> Market orientation is a business strategy that focuses on understanding and meeting the needs and desires of consumers to guide product development and improve customer satisfaction.

## What Is Market Orientation?

Market orientation is an approach to business that prioritizes identifying the needs and desires of consumers and creating products and services that satisfy them. Companies that have a market orientation consider the opinions and needs of their [target market](https://www.investopedia.com/terms/t/target-market.asp) as a critical component of their [research and development](https://www.investopedia.com/terms/r/randd.asp) (R&D) for new products based on consumer desires.

Established companies like Amazon and Coca-Cola leverage market orientation for competitive advantage. Amazon Lockers and Coca-Cola's diverse product range respond to customer demands.

Advocates of market orientation argue that traditional product development takes the opposite approach. That is, [marketing strategies](https://www.investopedia.com/terms/m/marketing-strategy.asp) focus on establishing key selling points to promote existing products rather than designing products that have the qualities consumers say they want.

### Key Takeaways

*   Market orientation focuses on identifying consumer needs to shape product development, unlike conventional product-focused marketing.
*   Companies with market orientation often see improved customer satisfaction and increased brand loyalty.
*   Established companies like Amazon and Coca-Cola leverage market orientation to continuously evolve and meet customer demands.
*   Market orientation can give businesses a competitive edge by adapting to ever-changing consumer preferences in a global market.
*   Understanding consumer desires can guide long-term strategies, even if immediate implementation isn't feasible.

## The Mechanics of Market Orientation

Market orientation is a customer-centered approach to product design. It involves [market research](https://www.investopedia.com/terms/m/market-research.asp) to find out consumers' immediate needs, main concerns, or preferences in a product category. Researchers use [activity, interest, and opinion (AIO) surveys](https://www.investopedia.com/terms/a/activities-interests-and-opinions.asp) and demographic data to understand target customer desires.

Companies may also employ additional data analysis to reveal trends and consumer desires that are not specifically expressed. Knowing these trends can help [product developers](https://www.investopedia.com/ask/answers/042815/what-difference-between-research-and-development-and-product-development.asp) meet or anticipate consumer needs. They may even inspire improvements that the consumer was not aware of as being an option.

This allows a company to focus its product development efforts on the characteristics that are most in-demand. With an increasingly global economy and the proliferation of choices for consumers, companies that adapt to a market orientation may benefit from a [competitive advantage](https://www.investopedia.com/terms/c/competitive_advantage.asp) over other companies.

## Benefits of Embracing Market Orientation

Market orientation often improves customer service and product support to address consumer concerns. This helps ensure customer satisfaction remains high with the company as a whole and promotes [brand loyalty](https://www.investopedia.com/terms/b/brand-loyalty.asp) and positive word-of-mouth advertising.

Companies must ensure all departments adopt market orientation to make it part of the [corporate culture](https://www.investopedia.com/terms/c/corporate-culture.asp). When effective, market orientation can help a company increase customer retention and propel growth in new demographics.

Sometimes, market orientation reveals customer desires that are not cost-effective or practical to implement. The business then must determine how to meet customer expectations in the best way possible.

At the very least, impractical ideas may inform long-term [development strategies](https://www.investopedia.com/articles/personal-finance/090815/basics-business-development.asp). Cost-ineffective options today might become possible later due to changes in technology, science, regulation, or market conditions.

## Comparing Market Orientation to Other Business Strategies

Development focused on market orientation puts consumers' desires first, creating the product around their expressed needs and wants. This contrasts with product orientation, a business philosophy that emphasizes getting the consumer to become aware of and like the features and benefits of a particular product.

[Product differentiation](https://www.investopedia.com/terms/p/product_differentiation.asp) often goes hand-in-hand with a product orientation approach. With this approach, the company employs an advertising strategy that aims at clearly identifying the attributes that distinguish a brand from its competitors.

Sales orientation focuses on persuading the consumer into immediate action through means such as online ads, social media, television commercials, in-store demonstrations, or [direct response marketing](https://www.investopedia.com/terms/d/direct-marketing.asp).

Any or all of these approaches may be required for a successful marketing strategy, but most businesses focus on one or a few as their primary focus.

## Case Studies: Market Orientation in Action

### Amazon

[Amazon](https://www.investopedia.com/insights/amazon-effect-us-economy/) is an example of a market-oriented company. As it has grown and developed, it has consistently added processes and features that clearly address concerns and desires expressed by consumers.

For example, many consumers, especially city dwellers, worry about getting packages delivered when they're not at home. The company responded with Amazon Locker, a network of self-service pickup boxes.

Delivery charges, no matter how reasonable, are a chief irritant to consumers, and a reason to buy locally instead of ordering online. [Amazon Prime](https://www.investopedia.com/personal-finance/8-lesser-known-benefits-amazon-prime/) charges an annual fee for the free delivery of most of its products.

### Coca-Cola

[Coca-Cola](https://www.investopedia.com/articles/markets/112515/how-does-cocacola-actually-make-money.asp) is another company that is famous for its market orientation. Considerable research goes into identifying new flavors that consumers will actually like, such as wild strawberry and lime. But those new flavors won't help Coca-Cola address the increasing health consciousness of consumers. That's why the company acquired [brands](https://www.investopedia.com/terms/b/brand.asp) including Dasani, Honest Tea, Smartwater, Simply Orange, Minute Maid, and Vitaminwater.

## The Bottom Line

The core concept of market orientation is a strategy that prioritizes consumer needs in product development to gain a competitive advantage. Market research plays a significant role in understanding consumer preferences and how it informs product development. Potential advantages of market orientation include increased customer satisfaction, brand loyalty, and competitive advantage.

Examples of successful market-oriented companies include Amazon and Coca-Cola. They've effectively utilized consumer feedback to enhance their offerings.

While market orientation focuses on consumer desires, it also requires balancing practicality and cost-effectiveness when implementing demands. Businesses can benefit by integrating consumer insights across all departments to ensure cohesive market-oriented strategies.