Market Orientation, Customer Selectivity and Firm Performance
Author: Aamir Khan
Publisher:
Published: 2008
Total Pages:
ISBN-13:
DOWNLOAD EBOOKMarket orientation is a well-known construct in the marketing literature. One reason for the extensive research on market orientation is that it is seen as the operationalization of the marketing concept itself. Extant literature provides evidence supporting the link between market orientation and firm performance. However, most of the evidence which links market orientation with firm performance comes from studies carried out in the goods context. The few studies that have been done in the services context show either a weak link with firm performance or no link at all. Further, the studies that have been carried out in the services context have generally been limited to a single industry. In this thesis, I explore the reasons as to why market orientation might be more strongly associated with firm performance in the goods context than in the services context. I suggest that one reason could be that services are by their very nature non-standardized, and that market orientation is aimed at satisfying all the customers. Therefore, market orientation may not be the dominant driver of firm performance in the services context, where it becomes very difficult to satisfy every single customer. In the goods context, however, market orientation will be a dominant driver of firm performance. I also suggest another construct, namely customer selectivity, as a driver of firm performance in the services context. Customer selectivity, it is argued, is anchored in the customer relationship management (CRM) literature. Since services are by their nature heterogeneous, i.e. non-standardized, firms which are customer selective will do well in the services context. However, one cannot exclude the possibility that, while market orientation might not be a good driver of firm performance in the services context, it might be an antecedent of customer selectivity. Therefore I develop an alternative model in which market orientation is conceptualized as a cultural orientation, and thus ac.
