Walking the Walk
Skip to content
Marketing Apr 1, 2009

Walking the Walk

Creating a market orientation

Businesspeople walk together over hand

runeer via iStock

Based on the research of

Gary F. Gebhardt

Gregory Carpenter

John F Sherry Jr.

When Intel’s CEO announced that “every idea and technical solution should be focused on meeting customers’ needs from the outset,” he was proposing a radical shift from an organization focused on microprocessor design to a company whose culture would prioritize understanding and meeting specific customer needs (Edwards, 2005). As more firms make the effort to become customer-focused, it is important to comprehend not only what a market orientation is, but also how such a transformation occurs.

A market orientation describes the process by which a company determines current and future customer needs and disseminates this information throughout the firm’s various divisions, which then act together as a unified organization to meet specified customer needs (Kohli and Jaworski, 1990). To companies with a market orientation, a focus on the customer is paramount. Merely defining a market orientation, however, is easier than actually creating a more customer-focused organizational culture. Some managers know what things in their organization need to be changed but do not know how to effect that change.

To promote a culture of “Harleyness,” Harley-Davidson evaluates prospective employees on their level of cultural fit and encourages employees to own and use motorcycles.How does a firm implement the cultural changes that will make customers a top priority in its organization? To answer this question, Gary Gebhardt (University of South Florida) joined forces with Gregory Carpenter of Kellogg’s marketing department and John Sherry (University of Notre Dame) to get an up-close look at companies in different stages of organizational change.

Four Stages to Creating a Market Orientation

Employing a variety of qualitative research methods such as oral histories, ethnographies, and historical documents, the researchers examined seven firms that were just beginning to adopt a greater market orientation, already in the process of such a change, or had recently completed the transformation. Over a period of ten months, the researchers conducted formal interviews with seventy employees; spent more than forty days observing and speaking with employees in executive meetings, during meals, and in company work and break areas; and reviewed hundreds of historical documents such as annual reports, press releases, and industry publications.

As Figure 1 illustrates, the analysis identified four stages in the process of creating a market orientation: (1) initiation; (2) reconstitution; (3) institutionalization; and (4) maintenance.

During initiation, executives or other powerful stakeholders first recognize an external threat to the company (such as failure to meet financial performance targets) and then prepare to implement a market orientation by identifying specific initiatives for the transformation process. For example, one of the companies studied was losing millions of dollars in revenue. In response, senior management outlined a new set of values expected of organization members (e.g., empathy, respect for others, collaboration) and identified process-focused change initiatives (e.g., communication systems, continuous improvement, information technology).

The next stage, reconstitution, involves presenting the plan to the entire organization simultaneously. The plan should describe the values that have been selected to guide the firm’s behavior, as well as the specific change initiatives that will occur. After presenting the plan, the firm can promote an organization-wide understanding of how cultural values affect the company’s ability to meet market needs by sending cross-functional teams to meet with customers and other key stakeholders. Ultimately, personnel who are unwilling to support the cultural transformation are replaced by new hires who share the values important to the organization. Once all the employees of a firm agree on a definition of the market and its unmet needs, they can collaboratively develop a strategy to meet those needs.

Together, these factors enable market-oriented firms to monitor and react to changes in the marketplace.

The third stage, institutionalization, occurs as a market-oriented culture becomes formally incorporated throughout the organization. Employee rewards are aligned with the firm’s performance in the marketplace; training is designed to reinforce cultural values; and decision-making power is decentralized and extended to all members of the organization. For example, during a transformation-related meeting between the shipping and sales departments, one company used suggestions from employees in both departments to resolve a communication problem; the result was a pricing structure adjusted to reflect actual shipping costs while still providing customers with the shipping options they wanted. Some executives in the companies that were studied relinquished their decision-making power and instead provided others with the values and information that should guide their decisions.

Finally, during the maintenance stage, the company protects its market-oriented culture from deterioration by screening new hires to ensure they fit the restructured image; creating activities that remind employees of the process of cultural change the company has undergone; and staying connected to the market through research and field visits. For example, to promote a culture of “Harleyness,” Harley-Davidson evaluates prospective employees on their level of cultural fit and encourages employees to own and use motorcycles; its executives attend rallies to keep in touch with customers. Maintenance requires firms to accept new policies and strategies only when they are consistent with core values.

More than Mere Lip-Service

These four stages show that the process of creating a market orientation involves more than simply performing a set of behaviors; it requires the widespread adoption of an organizational culture based on common values and a shared understanding of the market, as well as the distribution of intra-organizational power. Although the change process generally is initiated by an elite group, interdepartmental cooperation and proper reward systems are also critical to the successful implementation of a market orientation. Together, these factors enable market-oriented firms to monitor and react to changes in the marketplace.

Although firms may “talk the talk” of a market orientation, companies can “walk the walk” by successfully implementing cultural change designed to focus organizational efforts on meeting customer needs.


Edwards, Cliff (2005). “Shaking up Intel’s Insides.”Business Week, 3918: 35-35.

Kohli, Ajay K. and Bernard J. Jaworski (1990). “Market Orientation: The Construct, Research Propositions, and Managerial Implications.” Journal of Marketing, 54(2): 1-18.

Featured Faculty

James Farley/Booz Allen Hamilton Professor of Marketing Strategy; Director of the Center for Market Leadership; Faculty Director, Kellogg Markets and Customers Initiative (KMCI)

About the Writer
Aaron R. Brough is a doctoral student in Kellogg’s Marketing Department.
About the Research

Gebhardt, Gary F., Gregory S. Carpenter, and John F. Sherry (2006). “Creating a Market Orientation: A Longitudinal, Multifirm, Grounded Analysis of Cultural Transformation.” Journal of Marketing, 70(4): 37-55.

Read the original

Most Popular This Week
  1. What Happens to Worker Productivity after a Minimum Wage Increase?
    A pay raise boosts productivity for some—but the impact on the bottom line is more complicated.
    employees unload pallets from a truck using hand carts
  2. How to Get the Ear of Your CEO—And What to Say When You Have It
    Every interaction with the top boss is an audition for senior leadership.
    employee presents to CEO in elevator
  3. 6 Takeaways on Inflation and the Economy Right Now
    Are we headed into a recession? Kellogg’s Sergio Rebelo breaks down the latest trends.
    inflatable dollar sign tied down with mountains in background
  4. Which Form of Government Is Best?
    Democracies may not outlast dictatorships, but they adapt better.
    Is democracy the best form of government?
  5. When Do Open Borders Make Economic Sense?
    A new study provides a window into the logic behind various immigration policies.
    How immigration affects the economy depends on taxation and worker skills.
  6. How Offering a Product for Free Can Backfire
    It seems counterintuitive, but there are times customers would rather pay a small amount than get something for free.
    people in grocery store aisle choosing cheap over free option of same product.
  7. How Has Marketing Changed over the Past Half-Century?
    Phil Kotler’s groundbreaking textbook came out 55 years ago. Sixteen editions later, he and coauthor Alexander Chernev discuss how big data, social media, and purpose-driven branding are moving the field forward.
    people in 1967 and 2022 react to advertising
  8. Why Do Some People Succeed after Failing, While Others Continue to Flounder?
    A new study dispels some of the mystery behind success after failure.
    Scientists build a staircase from paper
  9. How Much Do Boycotts Affect a Company’s Bottom Line?
    There’s often an opposing camp pushing for a “buycott” to support the company. New research shows which group has more sway.
    grocery store aisle where two groups of people protest. One group is boycotting, while the other is buycotting
  10. 5 Takeaways on the State of ESG Investing
    ESG investing is hot. But what does it actually deliver for society and for shareholders?
    watering can pouring over windmills
  11. Could Bringing Your "Whole Self" to Work Curb Unethical Behavior?
    Organizations would be wise to help employees avoid compartmentalizing their personal and professional identities.
    A star employee brings her whole self to work.
  12. How Are Black–White Biracial People Perceived in Terms of Race?
    Understanding the answer—and why black and white Americans may percieve biracial people differently—is increasingly important in a multiracial society.
    How are biracial people perceived in terms of race
  13. What Went Wrong at AIG?
    Unpacking the insurance giant's collapse during the 2008 financial crisis.
    What went wrong during the AIG financial crisis?
  14. Why Well-Meaning NGOs Sometimes Do More Harm than Good
    Studies of aid groups in Ghana and Uganda show why it’s so important to coordinate with local governments and institutions.
    To succeed, foreign aid and health programs need buy-in and coordination with local partners.
  15. 3 Tips for Reinventing Your Career After a Layoff
    It’s crucial to reassess what you want to be doing instead of jumping at the first opportunity.
    woman standing confidently
  16. Immigrants to the U.S. Create More Jobs than They Take
    A new study finds that immigrants are far more likely to found companies—both large and small—than native-born Americans.
    Immigrant CEO welcomes new hires
  17. Podcast: Does Your Life Reflect What You Value?
    On this episode of The Insightful Leader, a former CEO explains how to organize your life around what really matters—instead of trying to do it all.