Evolution of the Market Orientation

Many American manufacturers have experienced four distinct stages in the life of their firms.The first stage, the production era, covers the early years of the United States up until the 1920s. Goods were scarce and buyers were willing to accept virtually any goods that were available and make do with them.In the sales era from the 1920s to the 1960s, manufacturers found they could produce more goods than buyers could consume. Competition grew. Firms hired more salespeople to find new buyers. This sales era continued into the 1960s for many American firms.

Starting in the late 1950s, marketing became the motivating force among many American firms and the marketing concept era dawned. The  marketing concept  is the idea that an organization should (1) strive to satisfy the needs of consumers while also (2) trying to achieve the organization’s goals. General Electric probably launched the marketing concept and its focus on consumers when its 1952 annual report stated: “The concept introduces … marketing … at the beginning rather than the end of the production cycle and integrates marketing into each phase of the business.”

Firms such as General Electric, Marriott, and Facebook have achieved great success by putting huge effort into implementing the marketing concept, giving their firms what has been called a market orientation. An organization that has a  market orientation  focuses its efforts on (1) continuously collecting information about customers’ needs, (2) sharing this information across departments, and (3) using it to create customer value.Today’s customer relationship era, the brown bar in started in the 1980s and occurs as firms continuously seek to satisfy the high expectations of customers.

A recent focus in the customer relationship era has been the advent of social networking, in which organizations and their customers develop relationships through social media websites such as Facebook, Twitter, and YouTube, among others. This focus has allowed organizations to understand and market to current and prospective customers in ways that are still evolving, such as in using social media.

An important outgrowth of this focus on the customer is the recent attention placed on  customer relationship management (CRM) , the process of identifying prospective buyers, understanding them intimately, and developing favorable long-term perceptions of the organization and its offerings so that buyers will choose them in the marketplace. This process requires the involvement and commitment of managers and employees throughout the organization and a growing application of information, communication, and Internet technology, as will be described throughout this book. Unfortunately, many expensive CRM computer systems have not provided the expected benefits because they failed to identify exactly which customer segments the company wanted to reach.