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Outside-In Versus Inside-Out Strategy
Adopting a Market Orientation
William Baker ConsultingMarketing StrategyCommunication StrategyBrandingAdvertising
Award Winning Author, Professor and Consultant619-402-3990, [email protected]
Google Scholar Page: https://scholar.google.com/citations?hl=en&user=If0w9hoAAAAJ
My Brief Definition of Marketing
The process of maximizing customer commitment for firms’ offerings (usually at a profit).
•This is done through Innovation, Branding and Relationships
•It is implemented through the marketing mix: product, pricing, promotion and distribution
Market OrientationInside-Out Thinking Outside-In ThinkingProfits are gained through an efficient use of resources and capabilities
Profits are gained through implementing superior value propositions
We seek to confront our competitors on all that they do
We seek to compete in spaces without direct competitors
Superior quality is defined by internal standards
Superior quality is defined by customers
Expanding the customer base is the key to profitability
Customer loyalty is the key to profitability
Outside-In ThinkingLess About You More About Your
CustomerGrow our North American market share in the medical device market
Alleviate pain, restore health and extend life (Medtronic)
Source superior coffee from the world’s best global production regions
To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time (Starbucks)
Grow our occupancy rate by 10% over 2 years
Ladies and Gentlemen serving Ladies and Gentlemen (Ritz-Carlton)
The Consequences of Inside-Out Thinking is IgnoringExternal
Events“There are not enough Indians in the world to defeat the Seventh Cavalry!”
O George Armstrong Custer
The Consequences of Inside-Out Thinking is Ignoring External
EventsO“Who the hell wants to hear actors talk?”
O H. M. Warner, Warner Brothers, 1927
The Consequences of Inside-Out Thinking is Ignoring External
EventsO“…We have a perfect record over the
last 40 years in predicting where we will use military force next. We’ve never once gotten it right.”
O Former Secretary of Defense, Robert Gates, PBS, January 14, 2014
The Consequences of Inside-Out Thinking is Ignoring External
EventsO 44% of lawyers would NOT recommend that
at young person pursue a career in law
O 83% of mergers and acquisitions failed to create any value for shareholders
O 60% of executives said that bad decisions are as common as good ones by executives in their company
A Firm’s Strategic Marketing Orientation and Company Performance
A firm’s market orientation refers to making customer satisfaction an organizing principle of the firm.
Develop and innovate products through an advanced understanding of:
(1) Customers (e.g., likes and dislikes, satisfaction, perceptions, etc.)
(2) The environmental factors that influence customers (e.g., technology, competition, the economy, socio-cultural trends, etc.)
Market Information
Responsiveness
Market Information
Dissemination
Market Information Generation
Market Orientation
The Synergy between the Marketing Concept and a Learning Culture
Flawed View of the World?
The effectiveness of a strong market orientation is compromised by corporate belief systems that are flawed or obsolete because they have not been updated to correspond to the market.
Obsolete beliefs within the organization can constrain action:
O We have only one key competitor.
O Our customers value ‘low price’ over ‘superior customer service’
O Our customers’ value benefit ‘X’ over Benefit ‘Y’.
Commitment to Learning
Shared Vision
Open-Mindedness
Learning Orientation
The Synergy between the Marketing Concept and a Learning Culture
Market Orientation
Learning Orientation
▲ Market Share
Interaction with Relative Market Share
▲ MS
Weak MO Strong MO
Strong LO
Strong LO
Inside -Out Outside In
Weak Market Orientation
Strong Market Orientation
Push products into Market
Fit products into Market
Emphasis on Efficiency Emphasis on Customer Satisfaction
Attack the Competition Out Flank the Competition
Expand the Customer Base
Maximize Customer Loyalty
SUMMARY
