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By Denis G.

3 minutes

The Market Driven Organization

How can your organization become more of a market driven organization? In order to be market driven, companies must do more than update their strategy or sales and marketing departments, they must transform their entire business toward the ultimate goal of continually responding to the ever changing requirements of their customers.

Achieve this and the business will be successful by delivering real value to its customers over and above that of its competitors. Another way to say this is that one of the advantages of being a market driven organization is that relationships with customers can be more enduring than other type of competitive advantage.

To be market driven the whole organization should have the customer as a major point of focus. This customer focus begins with the setting of corporate strategy and must be reinforced through the organizational structure and the setting of targets. Diagrammatically, you can think of this as follows.

Market Driven Organization

As can be seen from the above diagram the customer permeates all aspects of the business. Marketing strategy will derive from the corporate strategy, which in turn drives ALL the activities of the organisation. How well this execution happens will ultimately be seen in the results. To ensure the whole organization is focussed on the customer, bonuses and other incentives and rewards should be linked to customer focussed behavior in addition to results. As mentioned, the customer permeates the entire business, however having said that the most important aspects to link to the customer are corporate strategy and the KPIs.

When translating the corporate strategy into the sales and marketing strategy there are three points to consider…

Market Driven Organization Factors:

1. Market Segmentation

Which markets does the company want to target? Common ways to perform segmentation include by geography, by psychographics, and by benefits sought by the customer.

2. Customer Segmentation

Within a given market, what customer profiles does the company want to target?

3. Target Setting

What are the targets for the company? Here targets need to be set which ensure the organization is fully focussed on its customer. Note that this means much more than hitting sales or margin targets. Targets need to be picked which demonstrate that the business is becoming more and more customer focussed. Examples include customer satisfaction scores and customer lifetime value.

Ultimately what you should be looking to achieve is a good understanding of the market you intend to serve, combined with an understanding of what customers want and their priorities when making a purchasing decision. To back this up you need to put measurable targets (KPIs) in place that show the organization is moving in the right direction.

Becoming a market driven organization is not a one-time process – the cycle of listening and understanding the market and your customer and then taking steps to meet that need should be continually repeated. It can be a good idea to continually use a Deming Cycle (plan, do, check, act) to achieve this.

Cite this article

Minute Tools Content Team, The Market Driven Organization, Minute Tools, May, 2012,
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Denis G.

Originally hailing from Dublin, Denis has always been interested in all things business and started EPM in 2009. Before EPM, Denis held a leadership position at Nokia, owned a sports statistics business, and was a member of the PMI's (Project Management Institute’s) Global Executive Council for two years. Denis now spends his days helping others understand complex business topics.

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