What Counts versus what can be Counted: The Complex Interplay of Market Orientation and Marketing Performance Measurement

Abstract

Market orientation (MO) and marketing performance measurement (MPM) are two of the most widespread strategic marketing concepts among practitioners. However, some have questioned the benefits of extensive investments in MO and MPM. More importantly, little is known about which combinations of MO and MPM are optimal in ensuring high business performance. To address this research gap, the authors analyze a unique data set of 628 firms with a novel method of configurational analysis: fuzzy-set qualitative comparative analysis. In line with prior research, the authors find that MO is an important determinant of business performance. However, to reap its benefits, managers need to complement it with appropriate MPM, the level and focus of which vary across firms. For example, whereas large firms and market leaders generally benefit from comprehensive MPM, small firms may benefit from measuring marketing performance only selectively or by focusing on particular dimensions of marketing performance. The study also finds that many of the highest-performing firms do not follow any of the particular best practices identified.

Exploring Proactive Market Strategies : Managing the Market to Create Value

“…Thus, market orientation has turned from a unique source of competitive advantage into a necessary yet not sufficient condition for superior performance. For example, Frösén et al (2016) find that market orientation is only a predictor of superior performance when combined with the right type of marketing performance measurement, but they also do not find any consistent configurations that lead firms to superior business performance without being market-oriented.…”

“…Kumar et al, 2011;Frösén et al, 2016;Frambach, Fiss & Ingenbleek, 2016). It increasingly seems to be the case that market orientation is a necessary, but not sufficient condition for higher-than-average business performance.…”

“…It is not only market-oriented firms that employ market strategies-indeed I cannot imagine a firm that does not have any form of strategy for delivering value to its customers-but market orientation is still an important foundation for enabling superior value creation, meaning non-market-oriented firms will face greater difficulty in achieving superior performance (Blocker et al, 2011;Day, 2011;Frösén et al, 2016). Proactive market strategies thus represent the ways in which proactive firms leverage their superior insights and market-oriented capabilities to enable superior value creation (cf.…”

“…They attribute this to the fact that, because more and more firms are becoming market-oriented to manage stiffer competition, being market-oriented becomes less of a competitive advantage. Thus, they argue that market orientation is transforming from a source of competitive advantage into a cost of competing (Kumar et al, 2011;Frösén et al, 2016).…”

“…In order to stand out in a market environment where everyone is market-oriented to some degree, firms must find ways of being market-oriented that are adapted to their circumstances and go beyond the standard implementation (Kumar et al, 2011). While it is true that few firms manage to achieve higherthan-average performance from just leveraging their market orientation, it is also the case that few firms manage to achieve high performance without being market-oriented (Frösén et al, 2016;Frösén & Tikkanen, 2016). Thus, market orientation has turned from a unique source of competitive advantage into a necessary yet not sufficient condition for superior performance.…”