Market Orientation in the Bangladesh

The paper investigates the level of adoption of market orientation in the Bangladesh private banking sector. The paper also discusses the relevant past events or antecedents that are related to the adoption of market orientation in the banking sector in Bangladesh. Furthermore the effects of such market orientation on the customers, banks' financial performance and employees are also explored. Finally the article discusses the potential outcomes of adoption of market orientation in the Bangladesh environment. Bangladesh was founded in 1971 and right from the beginning it was facing post-war economic crisis and was classified as one of the five poorest countries in the world. All of the large manufacturing companies were nationalized by the government in order to improve the state of the economy but the efforts were unsuccessful due to lack of education and national infrastructure. Finally in the mid 1970s the government abandoned this policy of nationalization and began to denationalize all the companies. International organizations such as the World Bank and International Monetary Fund played an important role in this change especially during the 1980s and 1990s. The private sector started to develop and a large number of private banks opened up. This explosion of private banks created intense competition and in order to compete with each other the banks adopted market orientated approach to their operation. However there was no organized adoption of market orientation, thus the level of adoption was different for different banks. Market orientation adoption has been having trouble in spreading because of primitive mindset of top managers and resistance to change in the organizations. Most of the managers were educated and began their careers in the distant past when there was no significant focus on market orientation so they are resistant to it. However many positive effects have been discovered of adopting market orientation approach as it improves customer satisfaction, increases employee loyalty and improves the financial performance of the bank. Increased market orientation satisfies the customer and reduces their dissatisfaction and complaints; as a result employees have to face less stress and can perform their work effectively and efficiently. Improved customer satisfaction also increases customer retention and attraction which improves profitability. Despite the positive effects market orientation cannot be infused into a bank through formal education because most of the experienced trainers are from the old times who do not believe in market orientation and hiring foreign trainers is not feasible. Top management emphasis, market based rewards system and interdepartmental connected promote market orientation.

IMPORTANT POINTS

* Bangladesh has only recently started adopting market orientation in the banking sector. The reason for this is that the country has its roots in the restrictive and nationalized economic infrastructure. The country was poor and so was the state of the economy. There was a lack of quality education and creative and forward thinking individuals in the banking sector. Most of the banking executives began their careers in earlier times when there was less focus on market orientation. In the past times there was no competition and the banks did not need to be market orientated in order to attract customers and increase profitability. These old banking executives are relic of an old age who are hindering the development of market orientation with their resistance to change.

* Competition facilitates adoption of market orientation as all the banks have to compete for their market share. In order to attract customers banks have to provide superior products and services to their customers resulting in adoption of market orientation. Those who do not adopt market orientation risk losing customers as they leave for better options. Market turbulence also promotes market orientation as customers have several other options to choose from and banks constantly have to change and adapt to retain customers. This forces them to adopt market orientation to please and satisfy customers in order to survive in the competitive market.

* Antecedents are preceding event or history of a phenomenon. These antecedents are responsible for the current state of affairs and have effect on them. There are two kinds of antecedents to marketing orientation which are external and internal antecedents. The external antecedents include competitive intensity and market turbulence. Competitive intensity means the intensity of the competition between competitors in a market. A large number of competitors mean high level of competitive intensity. Market turbulence means

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