The Effect of a Market Orientation on Business Profitability

Abstract

Marketing academicians and practitioners have been observing for more than three decades that business performance is affected by market orientation, yet to date there has been no valid measure of a market orientation and hence no systematic analysis of its effect on a business's performance. The authors report the development of a valid measure of market orientation and analyze its effect on a business's profitability. Using a sample of 140 business units consisting of commodity products businesses and noncommodity businesses, they find a substantial positive effect of a market orientation on the profitability of both types of businesses.

The Moderating Influence of Organizational Support on the Development of Salesperson Job Performance: Can an Organization Provide Too Much Support?

“…Social/psychological support is represented by human resource practices and supervisor and coworker support, which attempt to reduce employee stress and enhance motivation and job satisfaction (e.g., Eisenberger et al 1986;Narver and Slater 1990;Wayne, Shore, and Liden 1997). Instrumental support is represented by organizational support service systems, such as information systems, market research, training, accounting, and facilities support, which provide customer-contact employees with resources to better serve and satisfy customers (e.g., Berry and Parasuraman 1997;Davis 1991).…”

“…The social/psychological dimension is an organizational climate perception that represents employees' beliefs that the organization values their contribution and cares about their well-being (Eisenberger et al 1986;Narver and Slater 1990). Based on the theory of exchange and the norm of reciprocity, it is argued that employees reciprocate with effort and loyalty to the support received from the organization (Eisenberger et al 1986).…”

Market orientation and organizational commitment in the Australian public sector

“…The term "close to the customer" was popularized by Peters and Waterman (1982), who used it to describe one of their eight attributes of "excellence". The term "market" oriented is to be preferred to "marketing" oriented as this highlights its organization-wide application (Kohli and Jaworski, 1990;Narver and Slater, 1990;Shapiro, 1988). A marketing orientation is seen to be specific to the activities of the marketing department or division.…”

Measures of marketing success

“…This paper adopts the Etzioni (1964) approach and will not further consider the firm's orientation (see Slater and Narver 1994;Narver and Slater 1990), nor stakeholders (see Ambler and Wilson 1995). We therefore assume that firms pursue goals, whether consciously or not and whether set by themselves or others, and that the extent of "success" is defined by the proximity of achievement of those goals, whatever they may be.…”