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Business scholars began to actively discuss the concept of market orientation in 1990 with a paper by Ajay K. Kohli and Bernard J. Jaworski for the "Journal of Marketing" that defined market orientation as organizational business intelligence focusing on the needs of the customer and how to apply that intelligence to the operations of the organization. That same year, John C. Narver and Stanley F. Slater in the "Journal of Marketing" defined it as an organizational culture that emphasizes value creation for the customer to create superior business performance for the company. In 1993, Rohit Deshpande, John U. Farley and Fredrick Webster published a paper in the "Journal of Marketing" defining it as a customer-first approach as opposed to competition first.
The primary significance of market orientation in business is the movement of emphasis from strict competition-driven decision-making to a more customer-service-driven decision-making. This change resulted from the realization that just beating the competition in terms of cost structure and distribution scope did not necessarily result in a successful company. Communications technology made it easier for a company to study the needs of the customer, and companies soon discovered that success came from giving the customer what the
An economy that is market-oriented operates in the same way, but the government functions in the role of the company, and the business world is the customer. In other words, a market-oriented economy is managed to improve and expand conditions that make doing business easier in providing what the consumer wants to buy. The emphasis is on promoting commercial consumption and creating favorable trade agreements that highlight key producing sectors.
Examples of market oriented approach can be seen in the mass marketers that strive to provide the lowest cost, highest quality and largest selection of products for their customers. Other examples are the proliferation of consumer finance vehicles such as credit cards and check cards that make it easier to buy goods and services.
While market orientation encourages the consumer to buy to create profits for business, it also encourages the consumer to buy more than he can afford. The result can be seen in the credit collapse of 2008 to 2009 and beyond when the consumer had accumulated so much debt as to be unable to afford the monthly payments, and defaults on real estate and consumer loans threatened to destroy the banking industry.Source: ehow.com