Customer-led and market-oriented: let’s not confuse the two

TLDR

During industry disruptions, customer power can lead to firm failure, yet theory and recent research distinguish two forms of customer orientation: a short‑term, reactive customer‑led philosophy and a longer‑term, proactive market‑oriented philosophy. The commentary aims to clarify the distinction between customer‑led and market‑oriented orientations. While early studies warned against customer orientation during disruption, evidence supports adopting a market‑oriented approach regardless of conditions. © 1998 John Wiley & Sons, Ltd.

Abstract

Christensen and Bower (1996) report the results of a study of how customer power contributes to the failure of leading firms during a period of industry discontinuity. They conclude that developing a customer orientation appears not to be wise advice under these conditions. However, this conclusion is contradicted by long-standing theory and recent research in marketing. In this commentary we distinguish between two forms of ‘customer orientation’ that are frequently confused. The first, a customer-led philosophy, is primarily concerned with satisfying customers' expressed needs, and is typically short term in focus and reactive in nature. The second, a market-oriented philosophy, goes beyond satisfying expressed needs to understanding and satisfying customers' latent needs and, thus, is longer term in focus and proactive in nature. Based on theory and substantial evidence, the advice to become market-oriented appears sound regardless of the market conditions a business faces. © 1998 John Wiley & Sons, Ltd.