Developing a Market Orientation

Citation

Molinari, J. (2000), "Developing a Market Orientation", Journal of Consumer Marketing, Vol. 17 No. 5, pp. 455-466. https://doi.org/10.1108/jcm.2000.17.5.455.1

The Marketing Science Institute (MSI) was established in 1961 as a not‐for‐profit institute with the “goal of bringing together business leaders and academics to create knowledge that will improve business performance”. Three significant events are credited in the Introduction as contributing to the development of increased emphasis on scholarship focusing on market orientation. Those events, a 1987 MSI conference in Cambridge, Massachusetts, a 1990 MSI conference, and the establishment of research on market orientation as a “highest research priority” for funding by MSI have resulted in an increasingly growing body of research. The purpose of this book is “to capture most of the key contributions to the scholarship on market orientation”.

All the chapters in this book were originally published as MSI working papers and most received MSI support. Seven of the 11 chapters were subsequently published in the Journal of Marketing. As one might expect from a collection of scholarly articles, Developing a Market Orientation has a great deal of substance, but is not an “easy read”. Edited by Rohit Deshpande of the Harvard Business School, and including the work of authors such as Frederick E. Webster, John U. Farley, John C. Narver and Stanley Slater, this is a compilation of high‐quality, scholarly articles that focus on a subject central to marketing and corporate strategy. Marketing academics and practitioners have long argued that a business that adopts a market orientation will realize significant improvements in terms of market performance. This book focuses on scholarship designed to test that general premise.

Developing a Market Orientation is defined in Chapter 2 as meaning the implementation of the marketing concept. While each chapter settles on a slightly different definition, Deshpande describes market orientation as operating at three levels:

1. 1.

   (1) “as a culture (the shared set of values and beliefs regarding putting customers first);

2. 2.

   (2) as a strategy (creating continuously superior value for a firm’s customers); and

3. 3.

   (3) as tactics (the set of cross‐functional processes and activities directed at creating and satisfying customers)”.

Developing a Market Orientation includes articles that were originally released between 1990 and 1998. Later articles clearly build on the earlier works, providing the reader with a comprehensive collection of articles on market orientation that represent the current state of research on the subject.

A brief summary of a few representative chapters may give the reader a feel for this book. Following the introduction in Chapter 1, which reviews the history that has led to the publication of this book, Chapter 2, “Construct, propositions and implications”, draws on an extensive literature review and field interviews in an attempt to define the domain of the market orientation construct. It also provides an operational definition, develops a propositional inventory and provides a comprehensive framework for future research. A version of this chapter appeared in the Journal of Marketing, Vol. 54 No. 2, pp. 1‐18.

Chapter 3, “The effect of market orientation on business profitability”, attempts to validate the basic premise that underlies marketing as a discipline, that a business that adopts a market orientation will improve its market performance. This chapter reports the development of a valid measure of market orientation and the analysis of its effect on business profitability. The study finds that market orientation has a substantial, positive effect on the profitability of both commodity and non‐commodity businesses. An earlier version of this chapter appeared in the Journal of Marketing, Vol. 54 No. 4, pp. 20‐35.

Chapter 8, “Market orientation and business profitability”, reports the results of a panel data analysis investigating the effect of market orientation on two measures of business performance:

1. 1.

   (1) sales growth; and

2. 2.

   (2) return on investment (ROI).

The positive relationship between market orientation and sales growth is consistent with findings of previous research, while the absence of a significant relationship between market orientation and ROI “provides a challenge for future research”.

Chapter 11, “The influence of market orientation on channel relationships”, examines the influence of market orientation on key factors that may influence the performance of the channel. The findings show support for the importance of a market orientation in a channel relationship to strengthen the relationship and to enhance organizational performance. This chapter reports that market orientation has a positive and significant effect on the level of trust in a channel relationship and that market‐oriented behaviors are a “critical means of building and reinforcing trust … to keep channels intact and to reduce channel tensions”. A version of this chapter appeared in the Journal of Marketing, Vol. 62 No. 3, pp. 99‐111.

Although the findings reported in this book should be of interest to all business leaders, Developing a Market Orientation will likely appeal most strongly to scholars and students of marketing. Since the chapters were originally published as MSI working papers and received MSI support, independent research in this area is not represented. However, this collection of articles provides a solid foundation for the work that is being done in the area of market orientation.