Market Orientation And Service Firm Performance - A Research Agenda

Market orientation is a corner-stone of marketing and management strategy. However, relatively little research has been conducted into the relationship between market orientation and performance in the context of services firms. This is surprising, given the rapid growth of the services sector in the past 30 years, and its importance as a source of job creation and wealth. This paper reviews the major research themes relating to market orientation and service firm performance and suggests an agenda for future research to improve our understanding of this important marketing and management issue. Although the roots of market orientation stretch back 45 years or more to the development of the marketing concept, intense research into this area has only occurred in the past 12 years. Renewed interest was sparked by two seminal articles published by Narver and Slater (1990) and Kohli and Jaworski (1990). These authors produced complementary models of market orientation and tested the links between orientation and performance. In turn, their findings created a flurry of interest from researchers interested in exploring the links between marketing and business strategy, market-oriented behaviours and various aspects of firm performance. Since then, there have been numerous articles exploring the nature of market orientation, its links to performance and whether these links are mediated or moderated by firm or market variables. A problematical issue has been the lack of consensus over how to define and measure market orientation. Is it a corporate culture or guiding philosophy which reflects the marketing or customer orientation concepts? In other words, does it promote the primacy of the customer, satisfying customer needs at a profit – thus creating value for both sellers and consumers – and diffusing customer-oriented attitudes and marketing practices throughout the organisation? Is it merely the management or marketing behaviours associated with implementing the marketing concept? Or is it a slightly broader philosophy which focuses on customers and competitors? Is it a more strategic marketing/management approach with prescribed behaviours such as scanning the market for information on customer needs and competitor actions and responding to market changes in a rapid and (hopefully) profitable manner? Although Narver and Slater (1990) conceptualised market orientation as a culture, they tended to measure its implementation, using both attitudinal and behavioural scales. However, one of their major contributions was to broaden the original marketing concept to include both customer needs and competitor actions as well as a strategic focus. Hooley et al. (1990) also saw market orientation as the implementation of the marketing concept, but limited their investigation to differences between companies with dominant marketing, sales or production orientations. Kohli and Jaworski (1990) considered market orientation in terms of market scanning,