John C. Narver

Market orientation and the learning organization.

Effective organizations are configurations of management practices that facilitate the development of the knowledge that becomes the basis for competitive advantage. A market orientation, complemen...

Does competitive environment moderate the market orientation-performance relationship?

Recent studies have shown evidence of a positive relationship between market orientation and performance. However, some scholars have suggested that competitive environment could moderate this rela...

The Positive Effect of a Market Orientation on Business Profitability: A Balanced Replication

Abstract Narver and Slaters (1990) finding of a positive relationship between market orientation and business profitability is retested in a broad sample of product and service businesses operating in a variety of industries. The assessment of the extent of market orientation is provided by the chief marketing officer, and profitability is assessed by the general manager, thus avoiding the problem of common respondent bias. The analysis of the influence of culture on business performance is extended by including a measure of entrepreneurial orientation in the study. The influence of a market orientation on business profitability is then compared with that of an entrepreneurial orientation. The regression coefficient for market orientation (.662) is higher in this replication than in the original study (.501), and the pairwise correlation coefficient for the relationship between market orientation and profitability is very similar in both studies (.362 and .345, respectively). No relationship is found between entrepreneurial orientation and business profitability. Thus, by drawing a sample from a more diverse population, avoiding the common respondent bias problem, and comparing the effect of a market orientation to that of an entrepreneurial orientation, the findings from this balanced replication increase confidence in the importance and generalizability of the market orientation–profitability relationship found in the 1990 Narver and Slater study.

Creating a Market Orientation

A market orientation is a business culture in whichall employees are committed to the continuous creation of superiorvalue for customers. However, businesses report limited successin developing such a culture. One approach to create a marketorientation, the approach taken by most businesses, is the ’’programmatic‘‘approach, an a priori approach in which a business uses educationprograms and organizational changes to attempt to implant thedesired norm of continuously creating superior value for customers.A second approach is the ’’market-back‘‘ approach, an experientialapproach in which a business continuously learns from its day-to-dayefforts to create and maintain superior value for customers andthereby continuously develops and adapts its customer-value skills,resources, and procedures. Theory suggests that both approachescontribute to increasing a market orientation. It also suggeststhat when the a priori education of the programmatic approachis sharply focused on providing a foundation for the experientiallearning, the combined effect of the two learning strategiesis the largest. The implication is that the two strategies mustbe tailored and managed as a coordinated joint strategy for creatinga market orientation.

Product‐market Strategy and Performance: An Analysis of the Miles and Snow Strategy Types

The Miles and Snow typology of product‐market strategy is a potential source of rich insights for developing marketing strategy. However, the drivers of performance for the Prospector, Analyser and Defender strategies have not been thoroughly studied. Using multiple measures of the entrepreneurial dimension of the Miles and Snow typology, clusters business units into the Prospector, Analyser and Defender strategy types. Analyses performance variation in the strategy types using organizational and market‐level variables, and find substantial explanatory power.

Competitive strategy in the market-focused business

Market orientation is a business culture which enlists the participation of all employees for the purpose of creating superior value for its customers and superior performance for itself. A substantial body of research finds a positive relationship between a businesss magnitude of market orientation and its performance. However, there has been no research into the competitive strategies through which a market-oriented business creates customer value. This paper extends previous work by showing that market-oriented businesses aggressively develop new products and services, focus on opportunities in market segments rather than in the mass market, and attempt to achieve competitive advantage both by increasing customer benefits and by reducing costs.

Additional Thoughts on the Measurement of Market Orientation: A Comment on Deshpande and Farley

Deshpande and Farley examinethe reliability and validity of three well-known market-orientationscales from which they derive a single market-orientation scale.We believe that their synthesized scale effectively capturesa businesss customer-value orientation which is the essenceof a market orientation, and that this scale development is adefinite contribution to marketing thought and practice. However,in two other respects we disaree with them. First, we believethere is more evidence of a positive market-orientation - performancerelationship than they acknowledge. Second, we hold that bothlogic and scholarly research strongly support the idea that amarket orientation is nothing less than an organizations culture.

Rational Management Responses to External Effects

This paper is a discussion of the external or side effects of business and rational responses to these external effects for profit-maximizing firms.1 Some people would argue that the rational respo...

Efeito da orientação para o mercado sobre a lucratividade da empresa

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 businesss performance. The authors report the development of a valid measure of market orientation and analyze its effect on a businesss 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.