Problem
Following World War II, the U.S. economy entered a very prosperous period during which consumers had money to spend, the middle class increased as a percentage of the population, and the economy shifted away from manufacturing toward services as the dominant sector. Education, technology, science, communication, and other service areas gained importance after the war, and companies quickly moved to provide services customers desired. Competition increased and customers became more sophisticated buyers. As a result, the sales tactics of the previous period failed to work effectively. Instead, companies focused on understanding exactly what customers wanted and tried to provide the product or service at a profit. The goal of marketing changed from selling to satisfying customers. The mantra for this orientation is "the customer is king/queen." Smarter companies also discovered that rather than focusing on single sales to customers, it was more profitable to build a relationship with customers for repeat sales. The concept of customer relationship marketing gained popularity, where companies would focus their efforts on understanding the target market so well that they built a relationship with customers over time. Membership clubs, discounts for repeat customers, and loyalty programs were attempts to strengthen the relationship between company and customers. CVS pharmacy's loyalty program, extracare, offers customers personalized coupons, exclusive deals and allows shoppers to earn rewards with every purchase that lead to future discounts. Perhaps one of the surprises from this approach was the discovery by some companies that not all customers are desirable. Best Buy discovered that some customers actually cost the company more money than they made the company because these customers returned merchandise more frequently or habitually used customer service resources. Best Buy moved to reduce this problem, but when the "customer is always right," it can be difficult. As a general time frame, we consider the market orientation prevalent from about 1950 through the mid-1990s, though many companies still have this orientation.
• Provide an example of a company that is applying market orientation. Discuss how the company is applying market orientation.