Academic journal article Management Dynamics

Market Orientation and Mode of Focus: A Study of South African Firms

Academic journal article Management Dynamics

Market Orientation and Mode of Focus: A Study of South African Firms

Article excerpt

ABSTRACT

Market-oriented firms have been described as those that apply the marketing concept, loosely interpreted to mean that they concentrate their efforts on identifying and satisfying customer needs. Other researchers, however, have emphasised that the marketing concept, as originally espoused, centred not solely on serving customers but also on creating them, and that this customer creation also requires a focus on technology.

This study utilises a framework of strategic archetypes in South African firms and then compares these firms in terms of measures of their levels of market orientation. It is found that Isolate firms exhibit markedly lower levels of information generation, information dissemination, responsiveness and overall market orientation than do the other archetypes. Somewhat surprisingly, however, the differences between Follower firms (those that supposedly follow the marketing concept most closely) are not nearly as dramatic as the literature would have one expect. Limitations are identified, implications for management singled out, and avenues for future research highlighted.

CUSTOMER ORIENTATION AND PRODUCT ORIENTATION

Putting the customer first, also known as customer-or market-orientation, is usually attributed to Peter Drucker's (1954: 37) injunction that the intention of any firm was to create and keep customers. Loosely this implies that in order to thrive, firms should try to learn the customer's needs and wants, and generate the products and services that will gratify these. The supposedly excellent firms in Peters and Waterman's (1982: 156-199) bestseller were those that were "close to the customer." Customer orientation has also been seen as the same as a business viewpoint called the marketing concept, which states that, "the key to achieving organisational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors" (Kotier, 1988: 17). In simple terms this means that firms should find out what customers want and give it to them.

The 1990s saw widespread theoretical and empirical publication in the marketing literature on the construct of market orientation (Harris and Ogbonna, 1 999; Deshpande and Farley, 1998; Seines, Jaworski andKohli, 1997; Slater and Narver, 1994; Jaworski and Kohli, 1993; Kohli, Jaworski and Kumar, 1 993; Narver and Slater, 1 990; Kohli and Jaworski, 1990) which has been defined as the degree to which the marketing concept is implemented (Kohli and Jaworski, 1990; Narver and Slater, 1990; Shapiro, 1988). While the view that discovering customer needs and wants, and satisfying these effectively and efficiently has intuitive appeal, the fact is that Drucker's (1954) concept of a firm embraced more than a customer orientation or merely the serving of customers. He also emphasised customer creation. Only serving customers is therefore an oversimplification of Drucker's philosophy and makes an implicit assumption of the exogeneity of customer wants and needs (Carpenter, Glazer andNakamoto, 1 997).

The creation of customers and the injunction to innovate (Drucker, 1973: 65-67) are less well articulated aspects of Drucker's original vision. Seen from this perspective, some authors (Berthon, Hulbert and Pitt, 2003, 1999, Christensen and Bower, 1996) contend that market orientation only stresses serving customers by catering to their observed or articulated needs. While market orientationists might argue otherwise, perusal of the three separate instruments developed by marketing academics (Deshpande and Farley, 1998, (MORTN); Kohli, Jaworski and Kumar, 1993 (MARKOR); Narver and Slater, 1990 (N-S)), to measure the construct of market orientation, strongly supports this emphasis. All of these items involve serving customers, and not creating them. Indeed, Slater and Narver (1998) argue that being customer- led (satisfying customers' expressed needs) is typically shortterm in focus and reactive in nature. …

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