Strategic Marketing Essay: Contingency Theory, Components, and Value

This essay provides a comprehensive overview of strategic marketing, focusing on market orientation and its five key components: customer orientation, competitor orientation, inter-functional coordination, organizational culture, and the creation of long-term shareholder value. The essay discusses how businesses can gain a competitive edge by understanding customer needs, analyzing competitors, coordinating internal functions, fostering a customer-centric culture, and prioritizing shareholder value. The Contingency Theory is also explored, highlighting the importance of adapting to external factors like industry rivalry and technological changes. Furthermore, the essay critically evaluates each component, acknowledging both its benefits and limitations, and providing a balanced perspective on the practical application of market orientation in the business world. The essay emphasizes the importance of aligning business strategies with customer needs, competitor analysis, and internal resources to achieve superior performance and long-term sustainability in the marketplace.

STRATEGIC
MARKETING

ESSAY ON STRATEGIC MARKETING - MARKETING ORIENTATION
Marketing orientation is a philosophy commonly used within corporate world that
stresses upon determining the needs and wants of customers with a view to fulfil them in due
course of time. A company which has marketing oriented approach emphasizes upon
manufacturing, designing and distributing only such products and services that can provide a
high level of satisfaction to customers. This ensures the sustainability of business enterprise in
long run and a strategic marketing approach adopted by entity to remain profitable in
marketplace. In other words, it can be said that marketing orientation refers to the generation of
market intelligence across the organisational premises keeping in consideration the present as
well as future demands of consumers (What does Marketing Orientation really mean?, 2019). It
is a type of business orientation which is superior to the other types due the element of fulfilment
of customer needs and wants being included in it. This knowledge is to be disposed across all the
departments of enterprise in order to tap the advantage of such approach for the company. Also,
it is essential that the response of adopting a marketing oriented approach is evaluated in context
of organisational premises. This business model evaluates the response of an enterprise to the
needs and demands of customers. The strategic decision taken under this philosophy revolves
around the fulfilment of consumer needs instead of doing what the business perceives to be right
for customers. Many large and successful business organisations are now adopting this approach
to gain a strategic edge in marketing.
The Contingency Theory Approach towards marketing orientation prescribes that
business must gain an insight into the behavioural characteristics of people so as to gain deep
knowledge of their needs, demands and preferences. This theory largely establishes a strategic
link between the analysis of external environment of business and sustainability of enterprise in
marketplace. It indicates that forces like organisational culture and approach as well as its
external environment has a large scale impact upon the functioning of business entity. This
theory has three variables namely, contingency, response and performance variables. As per the
ideology of this theory, contingency variables define the extent of industry rivalry and
technological changes. Response variables largely comprises of the overall structure of
marketing function in the form of interdepartmental co-ordination in company (Marketing
Orientation, 2018). Lastly, performance variables consist of market share, growth rate and
customer loyalty of organisation. Contingency theory establishes a link between all the three
1

variables and demonstrates the importance of analysing external environment of business, in
particular, customer behaviour to achieve better performance in marketplace ahead of
competitors. Also, it helps in increasing the profitability of company. The fit between an
organisation and its external environment will influence the firm’s performance.
The concept of marketing orientation is widely adopted by firms all across the global
market. It comprises of 5 components, namely, customer orientation, competitor orientation,
inter functional co-ordination, organisational culture and long-term creation of shareholder value
(Dibb and Stern, 2000). All of these together constitute what is known as market orientation.
When a firm adopts a market oriented approach, it leads to superior performance of business as
well as a number of internal benefits like esprit de corps, employee loyalty and commitment etc.
By gaining proper understanding of market and customers, company strives to build capabilities
and potential for effectively responding to changes taking place in market. Customer focus and
responsiveness of company towards the needs and demands of consumers mark the foundation of
a marketing strategy and its implementation within organisational premises (Ngo and O'Cass,
2012).
(Source: Components of Market Orientation, 2019)
Customer orientation is an essential component of marketing orientation which proposes
business enterprises to gain an understanding of the behavioural characteristics of consumers.
This is important for entities so as to create superior value for them in terms of products and
services that can enhance their existing standard of living. As per the Contingency theory, it is
essential for companies to evaluate the needs, demands and preferences of customers at regular
2
Illustration 1: Components of Market Orientation

intervals to design, develop and sell such products that can enhance their level of satisfaction.
Also, customer orientation becomes necessary where businesses strive to attain a competitive
edge over rivals to ensure their sustainability in market for a long period of time. In today's
world, customers are increasingly becoming aware about the importance of giving attention to
the quality of product. Also, their ideology has transformed in a manner that they desire products
that can meet their requirements (Azizi, Ghytasivand and Fakharmanesh, 2012). To achieve this,
business enterprises need to be sensitive towards customers and their needs. This is essential to
establish a strong image of company in the mind of consumers and gain more revenues than their
competitors in the highly strategic environment. In response to this, organisations are putting
substantial efforts to build healthy relationships with people and target customers. These entities
have recognised the significance of analysing distinct groups existing within population and their
key needs to stay strategic.
Adopting a customer centred approach generally assists business organisations in
enhancing their profitability, yet it seems to have a downside too. It is noted that when an
organisation pays too much significance to customer orientation, it ignores the fact that it exist in
corporate world to ensure high growth rate and profitability (Baker, 2016). Customer orientation
does not lay emphasis upon the tools, techniques and strategies used by competitors within same
industry. Also, it does not take into account the external environment of business in terms of
political and legal stature which can be harmful for business entity at times.
Competitor orientation is yet another key element of marketing orientation. It largely
demonstrates deep knowledge associated with the short and long term capabilities of rivals
within market. Every business enterprise that exists in marketplace has the primary objective of
earning high profits. Also, enterprises long to look for opportunities within the industry that can
provide a strategic edge to company over its rivals. By gaining proper understanding of the tools
and strategies adopted by competitive businesses, company can design and develop such
marketing strategy that can provide an advantage to company (Drummond & Ensor, 2005). Also,
by utilising a strategy that is aligned with the strategies and systems used by rivals, company can
ensure to gain a high stake in marketplace. The contingency theory of marketing orientation also
proposes that business enterprises should gain an insight into the external environment at regular
intervals. Competitive enterprises within same sector are an important element of external
environment. Thus, by understanding the significance of evaluating and analysing the
3

competitors and their operational and marketing strategies, company ensures that it stays in
marketplace for a long duration of time (Ormrod, 2013). Also, as the contingency theory
establishes link between evaluation of external environment and performance of business,
enterprise can enhance its profitability by tapping advantage of external analysis.
Although competition orientation is necessary for every business enterprise, yet it ignores
the basic element for which a business functions, namely, customers. The most essential
component for any business organisation is customers. Any business enterprise that does not
analyse and evaluate the needs and preferences of consumers at regular intervals can not sustain I
market for long duration. It is essential for enterprises to analyse the diverse customer groups
present within the population of a nation (Grinstein, 2008). Enterprises should design and
develop products and services according to the requirements and needs of customers instead of
emphasizing upon the strategies of competitors.
Inter-functional co-ordination is yet another important component of marketing
orientation which lays an emphasis upon utilising the resources of company so as to create value
for customers. It is imperative for business organisations to use the resources available with the
enterprise in an effective and efficient manner. This will assist the organisation in gaining an
edge over its competitors by strategically making use of the plethora of resources so as to design
and develop products and services for consumers. As per the Contingency theory of marketing
orientation, it is essential that enterprises make use of all the resources presently available in
company so that it does not lag behind its rivals in any manner (Urde Baumgarth and Merrilees,
2013). Also, this helps the enterprise in ensuring that organisations stays in market for a long
duration of time by strategically developing and distributing such products that can meet the
demands of target customers. Further, by maintaining a culture within entity that encourages the
wholesome utilisation of resources with an aim not to leave any market opportunity associated
with meeting the needs and demands of customers.
Although giving priority to the present needs and requirements of customers as well as
business is important, yet inter-functional coordination fails to serve one purpose. This
component fails to recognise the future needs of consumers as well as enterprise. This implies
that entity focuses upon maximum utilisation of resources in present context which does not
leave resources that can be used for future needs of business (Jain and Ali, 2013). The main aim
4

of entity should be optimally utilise resources in a way that they can render adequate satisfaction
to customer as well as strive to save resources for future requirements.
Organisational culture as a component of marketing orientation establishes a link
between managerial as well as employee behaviour and satisfaction derived by customers (Raju,
Lonial and Crum, 2011). For every business enterprise that functions as an active part of industry
as well as market, it is essential to adopt and encourage a culture which emphasizes upon
keeping a customer centred approach. The Contingency Theory Approach towards marketing
orientation also stresses upon analysing the behavioural characteristics of individuals within and
outside the organisation so as to create a link between them. This theory proposes a deep
evaluation of behavioural aspects of human resources inside and outside enterprise with an aim
to link them to gain a strategic edge in market over its rivals (Laukkanen and et. al., 2016). Also,
it ensures that business sustains in market for a long duration of time by focussing upon
delivering products and services according to customers. This element demonstrates marketing
orientation as a culture rather than an approach or process. It is a collection of values, norms,
mindsets, behavioural characteristics of employers and employees together with system,
structure and control of company. This helps in giving a boost to the performance of company
thereby enhancing its overall profitability.
Although, organisational culture puts a strong opinion in relation to marketing orientation
yet it can be debated that organisational culture does not take into account the analysis of rivals.
It is essential for business enterprises to assess and evaluate the short-term and long-term
capabilities of other competitive firms within the industry to gain knowledge about the actual
position of company in marketplace (Liao and et. al., 2011). Thus, organisational culture fails to
gain an insight into strategic and competitive environment of business which is a key factor that
affects the functioning and sustainability of organisation.
The last component of marketing orientation is creation of value for shareholder for a
long period of time. This illustrates that business entities operate in a manner that their
operations and functions can benefit their growth and create large amount of profits. The primary
objective of every business enterprise is earning profits so as to sustain in market for a long
duration of time. Contingency Theory of marketing orientation also consists of performance
variables which are concerned with the long term performance of company in term of business
growth and profits (McLean, 2012). This implies that business entities should adopt such
5

practices and methods that can help them gain a strategic edge in industry. This ensures their
long term survival and a competitive advantage over the rivals within same business sector. This
component largely focuses upon creation of large value for shareholders which are an essential
part of any organisation.
Although creation of value for shareholder (profit) is the primary objective of any
enterprise, it ignores a critical aspect of business, namely, customer satisfaction (Sargeant and
MACQUILLIN, 2016). Here, the aim is to earn profits in the most effective and efficient manner
by use of optimum resources and funds. Yet it ignores the fact that gaining high satisfaction from
customers is a prerequisite for businesses to ensure that they exist in market for a long period of
time (Ngo and O'Cass, 2012). Where the products and services being delivered by enterprises are
not as per the needs and wants of consumers, it will lead to shifting of interest of customers
towards alternate brands that can meet their expectations. Thus, it can be debated that this
component of marketing orientation is not aligned with enhancing customer loyalty and gaining
their satisfaction which can be adverse for the enterprise.
CONCLUSION
From the above discussion, it can be comprehended that marketing orientation is highly
associated with the long term performance and growth of business enterprise. Also, it is analysed
that there are certain components of this type of business orientation which have their own
praises and criticisms. Thus, it is essential that an entity adopts a marketing oriented approach
only when it takes into consideration the downside of all the elements associated with this
approach.
6

REFERENCES
Books and Journals
Azizi, S., Ghytasivand, F. and Fakharmanesh, S., 2012. Impact of brand orientation, internal
marketing and job satisfaction on the internal brand equity: The case of Iranian’s food
and pharmaceutical companies. International Review of Management and Marketing.
2(2). pp.122-129.
Baker, M. J., 2016. What is marketing?. In The Marketing Book(pp. 25-42). Routledge.
Dibb, S. and Stern, P., 2000. Further thoughts on the marketing trifid: the case of marketing
orientation. Journal of Marketing Education. 22(3). pp214-224.
Drummond, G. & Ensor, J., 2005. Introduction to Marketing Concepts. 1st ed. Oxford:
Butterworth-Heinemann
Grinstein, A., 2008. The relationship between market orientation and alternative strategic
orientations. European Journal of Marketing. 42(1/2). pp115-134.
Jain, R. and Ali, S. W., 2013. Self-efficacy beliefs, marketing orientation and attitude orientation
of Indian entrepreneurs. The Journal of Entrepreneurship. 22(1). pp.71-95.
Laukkanen, T. and et. al., 2016. Does market orientation pay off without brand orientation? A
study of small business entrepreneurs. Journal of Marketing Management. 32(7-8).
pp673-694.
Liao, S. H. and et. al., 2011. A survey of market orientation research (1995-2008). Industrial
Marketing Management. 40. pp301-310.
McLean, F., 2012. Marketing the museum. Routledge.
Ngo, L. V. and O'Cass, A., 2012. In search of innovation and customer‐related performance
superiority: The role of market orientation, marketing capability, and innovation
capability interactions. Journal of Product Innovation Management. 29(5). pp.861-877.
Ngo, L. V. and O'Cass, A., 2012. Performance implications of market orientation, marketing
resources, and marketing capabilities. Journal of Marketing Management. 28(1-2).
pp.173-187.
Ormrod, R. P., 2013. A conceptual model of political market orientation. In Current issues in
political marketing (pp. 53-70). Routledge.
Raju, P. S., Lonial, S. C., Crum, M. D., 2011. Market orientation in the context of SMEs: A
conceptual framework. Journal of Business Research. 64. pp1320-1326.
Sargeant, A. and MACQUILLIN, I., 2016. Marketing for nonprofit organisations. In The
Marketing Book (pp. 555-576). Routledge.
Urde, M., Baumgarth, C. and Merrilees, B., 2013. Brand orientation and market orientation—
From alternatives to synergy. Journal of Business Research. 66(1). pp.13-20.
Online
Marketing Orientation. 2018. [Online]. Available Through:
<https://www.studiowide.co.uk/marketing-orientation/>.
What does Marketing Orientation really mean?. 2019. [Online]. Available Through:
<https://www.studiowide.co.uk/marketing-orientation/>.
7