Customer orientation
A firm in the market economy survives by producing goods that persons are willing and able to purchase. Consequently, ascertaining consumer demand is vital for a firm's future viaptatude and even existence as a going concern. Many companies today have a customer focus (or market orientation). This implies that the company focuses its activities and products on consumer demands. Genereally speaking, there are three ways of doing this: the customer-driven approach, the market change identification approach and the product innovation approach.
In the consumer-driven approach, consumer wants are the drivers of all strategic marketing choices. No strategy is pursued until it passes the test of consumer research. Every aspect of a market providing, including the nature of the product itself, is driven by the necessities of potential customers. The starting point is always the consumer. The rationale for this approach is that there is no reason to spend R&D funds managing products that people will not buy. History attests to many products that were commercial failures in spite of being technological breakthroughs.
A formal approach to this customer-focused marketing is called SIVA (Solution, Information, Value, Access). This system is rudimentaryally the four Ps renamed and reworded to provide a customer focus. The SIVA Model offers a demand/customer-centric alternative to the well known 4Ps stock side model (product, price, placement, promotion) of marketing management.
| Product | → | Solution |
| Price | → | Value |
| Place | → | Access |
| Promotion | → | Information |
If any of the 4Ps were problematic or were not in the marketing factor of the business, the business could be in trouble and so other companies may appear in the near bys of the company, so the consumer demand on its products will decrease.
Organizational orientation
In this sense, a firm's marketing department is usually seen as of prime relevance inside the functional level of an organization. Information from an organization's marketing department would be used to guide the actions of other departments inside the firm. As an example, a marketing department could ascertain (via marketing research) that customers desired a new type of product, or a new usage for an existing product. With this in mind, the marketing department would inform the R&D department to develop a prototype of a product/service based on customers' new desires.
The production department would then start to manufacture the product, while the marketing department would hones in on the promotion, distribution, pricing, etc. of the product. Additionally, a firm's finance department would be consulted, with respect to securing appropriate funding for the development, production and promotion of the product. Inter-departmental conflicts may occur, should a firm adhere to the marketing orientation. Production may oppose the installation, support and servicing of new capital stock, which can be needed to manufacture a new product. Finance may oppose the required capital expenditure, since it could undermine a comfortable money flow for the organization.