Summary
Summary Articles Theories of Marketing
- Course
- Institution
Summary of all the mandatory articles of Theories of Marketing
[Show more]
Seller
Follow
victorroos32
Reviews received
Content preview
Theories of Marketing – Master BACompulsory articles
Victor Roos
Topic 1 Topic 2
Article Page Article Page
1.1 – Narver & Slater, 1990 2 2.1 – Laughlin, 2014 19
1.2 – Slater & Narver, 1998 7 2.2 – Van den Driest et al., 2016 21
1.3 – Achrol & Kotler, 2012 10 2.3 – Pai & Arnott, 2013 24
1.4 – Homburg et al., 2017 15 2.4 – Magids et al., 2015 27
Topic 3 Topic 4
Article Page Article Page
3.1 – Almquist et al., 2016 30 4.1 – Nord & Peter, 1980 48
3.2 – Day, 2011 33 4.2 – Wells, 2014 51
3.3 – Lemon et al., 2001 38 4.3 – Gelbrich et al., 2017 55
3.4 – Edelman & Singer, 2015 41 4.4 – Chen et al., 2011 59
3.5 – Kim & Mauborgne, 2005 43
3.6 – Burke et al., 2010 47
Topic 5
Article Page
5.1 – Dwivedi et al., 2010 61
5.2 – Hsu et al., 2016 65
5.3 – Watson et al., 2015 70
5.4 – Hsieh et al., 2005 75
5.5 – Silveira et al., 2017 78
,Theories of Marketing – Master BA – Compulsory articles
1.1 – Narver & Slater, 1990; The effect of a market orientation on business
profitability
Author(s): John C. Narver, Stanley F. Slater
Year: 1990
1. What is the main contribution/idea/conclusion of the article?
→ Abstract – Introduction – Conclusion– 3/4 sentences
The main contribution is that this article gives a valid measurement in how to define the market
orientation/performance relationship. Market orientation consists of three behaviors: customer
orientation, competitor orientation, and interfunctional coordination. However, the study must be
replicated to strengthen external validity. For managers it is important to score high on all three
dimensions. This score must be the foundation for a business's competitive advantage strategy.
2. What is the context and goal of this study?
→ Introduction – Conclusion
→ Goal of the study: go against a belief/add something new to it/put it in another context
It is widely believed that market orientation will improve market performance (so, a positive effect).
However, so far (in 1990), no valid measure has been developed of it. Therefore, the goal of the article
was to develop a measurement for market orientation. This is relevant because managers do not
exactly know what market orientation is and what its actual effect on business performance may be.
Therefore, this study adds something new to the knowledge of marketing. It stresses the relationship
between market orientation and performance.
3. Type of research and methodology
→ Introduction – Methodology
→ Type of research: conceptual/empirical/literature review
Empirical article. The article starts off with an introduction of market orientation and performance and
after that, tests the hypotheses.
4. How are the authors trying to convince you?
→ Main part of the article – Discussion – Conclusion
4.1 Results
In the first part of the article the authors describe what market orientation and performance are (4.1a).
in the second part they test the validity and reliability of market orientation (4.1b). After that they
describe the effect of market orientation on business performance (4.1c). In the last part, they propose
control variables and test these on 110 SBU’s (4.1d).
4.1a – Marketing orientation and performance
If an organization wants to consistently achieve above-normal market performance, it must create a
sustainable competitive advantage (SCA). This desire drives a business to create and maintain a culture
that will produce these behaviors. This is called market orientation. A market-oriented seller
understands that there are many potential sources of SCA. Such a business continuously examines
these alternative sources to see how it can be most effective in creating sustainable superior value. To
2
Victor Roos
,Theories of Marketing – Master BA – Compulsory articles
maximize its long-run performance, the business knows how it must build and maintain a long-run,
mutually beneficial relationship with its buyers.
Market orientation consists of three behavioral components and two decision criteria. The three
behavioral components are: (1) customer orientation, (2) competitor orientation, and (3)
interfunctional coordination. If the latter is not available, effective advocacy and leadership are needed
to overcome each functional area’s isolation from the other functions. The two decision criteria are:
(1) long-term focus and (2) profitability. The three behavioral components comprehend the activities
of market information acquisition and publication, and the coordinated creation of customer value.
4.1b – Validity and reliability of market orientation
The authors check for the validity and reliability of market orientation. In order to test, the state the
following hypothesis: market orientation is a one-dimension construct consisting of three behavioral
components and two decision criteria and that each of the five can be measured reliably with a multi-
item scale. The authors hypothesize a one-dimension construct because the three behavioral
components and two decision criteria are conceptually closely related: in order to maximize long-run
profits, a business must continuously create superior value for its target customers. In order to do this,
a business must be customer oriented, competitor oriented, and interfunctionally coordinated.
The sampling unit is 140 strategic business units (SBU’s) of a major western corporation, all in the
forest products division of the corporation. 371 questionnaires (84% response rate) could be used.
There were 113 SBU’s with no missing data. There are three types of businesses: commodity, specialty
product, and distribution businesses. The latter two are also referred to as non-commodity businesses.
After that, they test for:
- Face validity
- Reliability: the three behavioral components are considered to be reliable (> 0.07), while
long-term orientation and profit are not considered to be reliable.
- Construct validity (convergent validity, discriminant validity, concurrent validity): the
relationships of the three behavioral market orientation components with three other
management policy variables (HRM, policy, differentiation-based competitive advantage, and
low-cost based competitive advantage) that are conceptually linked to market orientation
were tested.
To conclude, there is evidence of convergent validity, discriminant validity, and concurrent validity,
and therefore there is evidence for the construct validity of the three-component model of market
orientation.
As all three components are equally important, a business’s market orientation score is the average of
the three components. The performance variable in the analysis is the business’s return on assets
(ROA) in its principal served market segment over the past year in relation to the ROA’s of all other
competitors.
4.1c – The effect of market orientation on business performance
H2: The greater a business's market orientation, the greater the business's profitability will be, other
things being equal. This means finding a positive relationship between market orientation and business
profitability within all three types of businesses in the sample. However, the authors do not expect to
find the same form of the relationship among the three types of businesses.
Or: there is a positive relationship between market orientation and business profitability
3
Victor Roos
, Theories of Marketing – Master BA – Compulsory articles
The authors expect that an increasing relationship between market orientation and business
profitability is most likely for the non-commodity businesses, and least likely for the commodity
businesses. A commodity business may maintain an internally oriented perspective of itself, including
a price-auction marketing strategy. Such a business thinks it is just ‘selling lumber’ instead of
‘identifying and satisfying buyers’.
The authors expect that those commodity
businesses that have the lowest mean on market
orientation include many of the largest
businesses, because they may perceive that
increasing their market orientation could be
substantially costly and thus unattractive, at least
in the short run. As these companies have a
traditional internal orientation, they are likely to
be stuck in the middle as they will just partly
adopt a market orientation. They will do some of
the first steps but will not change everything. The implication for this is that for commodity businesses,
the relationship between market orientation and profitability is U-shaped: those with the highest
market orientation have the highest profitability, and those with the lowest market orientation have
the second highest profitability. This can be explained by the fact that those that have low market
orientation (so very internally oriented) may be very consistent and efficient in what they do.
4.1d – Control variables
Lastly, the authors tested 8 control variables that need to be controlled in analyzing the effect of
market orientation on a business’s profitability. These control variables were then tested in a
regression analysis using 110 SBU’s.
The general implication is that the commodity businesses with the highest degree of market
orientation successfully pursue both differentiation and low-cost strategies. This implication holds
equally for the non-commodity businesses
Much of the control variables are much like the five forces of Porter (1979). However, Porter describes
these from a competitive view and in this article, they are described from a marketing point of view.
4.2 Main conclusion
For commodity businesses the relationship between market orientation and profitability will be U-
shaped: businesses with the highest market orientation generate the highest profitability, business
with lowest market orientation generate second highest profitability (because these companies are
the most internally oriented and thus may be very consistent and efficient in what they do → they
achieve profit success through a low cost strategy) and the businesses in the midrange of market
orientation generate the lowest profitability.
Even though the study must be replicated, the findings suggest that after controlling for important
market-level and business-level influences, market orientation and performance are strongly related.
Thus, a market orientation must be the foundation for a business’ competitive advantage strategy.
4
Victor Roos
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller victorroos32. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $5.38. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
56326 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now