A Short Note on Market Orientation
Market orientation (MO) is one of the most visible phrases in marketing, especially in the MBA and MSc courses on marketing. In many ways it has become an umbrella term (and thus in danger of losing its effectiveness), and is sometimes confused with the marketing concept, customer satisfaction, customer orientation etc. Even though there might be an overlap with the latter terms, this short, friendly note will define MO more precisely and set it in the context of top academic research, especially since 1990.
Origins: The Marketing Concept
Some highly popular textbooks claim MO is synonymous with the marketing concept. For example, one of most ...view middle of the document...
In a similar way, MO was operationalized and scales were created. These two scales have withstood the test of time (well, over two decades!). We will explain this below.
Kohli and Jaworski (1990) in the first paragraph of their famous paper stated “We use the term ‘market orientation’ to mean the implementation of the marketing concept”. But how do we go about measuring this implementation? In academic research, one begins with a concept (yes, you guessed it, we begin with the marketing concept) and turn it into a construct (i.e. a well-defined concept which is now in a position to be measured). So Kohli and Jaworski (1990) said that the MO construct had three parts: Intelligence Generation (knowing what a customer wants, and needs, but also what a competitor is doing, what the government regulations have to say and so on); Intelligence Dissemination (responding to a market need will require the participation of all departments in an organization); and Responsiveness (well, you guessed it again! If an organization collected all kinds of intelligence, and even disseminated these internally, but sat on the information for ever and ever, it will not be very market oriented!).
Yes but where is the scale? If you read their second paper (Jaworski and Kohli 1993) you will find the 32-item scale at the end of the paper. We cannot reproduce all the items here but will give an example. Under MO (Intelligence Generation) one of the several items reads like this: “In this business unit, we meet with customers at least once a year to find out what products or services they will need in the future.” This is part of the MO scale. A respondent will agree or disagree, to varying extent (often from 1 to 7, on a Likert scale) with the statement. We can add up all these scores and then perform some statistical procedure on them in line with a diagram we call a “conceptual model” which links many such constructs and variables. Then we can draw some conclusions, interpret our findings in a larger context and note the limitations. Then we can suggest further research, and so and so on.
What about the other paper? You can look it up yourself in detail: It is by Narver and Slater (1990). They believe that market orientation is the organizational culture that most effectively and efficiently creates the necessary behaviours for the creation of superior value for buyers, and thus, continuous superior performance for the business. They operationalize the construct differently – it consists of customer orientation, competitor orientation and interfunctional coordination. Interestingly, Kohli and Jaworski (1990) do not really use the word “culture” but Narver and Slater (1990) use it all the time. Do you think it is an important difference?
MO and Firm Performance
Sure, that seems a plausible idea, you might be thinking, but does it really lead to improved firm performance? This leads us to the whole issue of empirical research – what seems so obvious might...
