The Development of Market Orientation (MO) and its Origin

Market orientation (MO) consists of all activities geared towards the creation of a sustainable competitive advantage through a market- focused enterprise, in which superior customer values are created (Jaworski and Kohli, 1990; Narver and Slater, 1990; Day, 1994; Cano, Carrillat and Fernando, 2004; Ellis, 2006 ; Hou, 2008;). Kohli and Jaworski (1990) define MO as “the organisation-wide generation of market intelligence pertaining to current and future needs of customers, dissemination of intelligence within an organisation

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and responsiveness to it”. Hence, the authors adopted the three process approach to the conceptualisation of the MO; intelligence generation (gathering of market information relating to customers, competitors and the business environment), intelligence dissemination (the spreading of the gathered information across all organizational departments) and responsiveness to market intelligence (taking actions in line with the market intelligence gathered to utilise and effect firm success).

Due to the perceived incompleteness in the conceptualization of MO, Narver and Slater (1990) took a different perspective and defined the construct as “the organisational culture that most effectively and efficiently creates the necessary behaviours for the creation of superior value for buyers and thus superior performance for the business.” Based on this definition, the authors conceptualised MO to be composed of- customer orientation, competitor orientation, and inter-functional coordination. They also added two decision criteria; long-term focus and profitability, which were later taken out of the questionnaire due to their poor levels of reliability.

The market orientation construct has occupied the centre stage of the marketing literature in the past three decades. Apiah-Adu (1998), Lafferty and Hult (2001) suggest that the MO based on the marketing concept is seen and used for implementing the marketing concept. Market-oriented firms seek to understand the expressed current and latent future needs of the market and develop products to satisfy those needs (Narver and Slater, 1990). Hence, marketing authors assert that the employment of a market-oriented strategy to organisational activities will result in better firm performance (Hooley, Saunder and Pierce, 2008). To become market oriented, firms must transcend the realms of needs satisfaction through the acquisition and understanding of market information. It requires developing dynamic capabilities to fully employ inter-functional coordination to achieve sustainable competitive advantage (SCA) in the market (Kohli and Jaworski, 1990; Ruekert, 1992; Day, 1994).

While most scholarly activities on the marketing concept and market orientation, in particular, have focused on the USA and the developed world, some attention has been offered in other developing countries (Hooley et al., 1990; Ennew et al., 1993; Marinov et al,. 1993; Appia-Adu, 1998, Winston and Dadzie, 2002; Osuagwu, 2006; Nwokah, 2008). Marinov et al. (1993) in a study of Bulgaria found the existence of four clusters in the marketing environment, which includes the total implementation of marketing to be just one of the four. Others have found some barriers to the adoption of the marketing concept and MO including the absence of skills, inadequate understanding of the marketing,

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manager and employee opinions, beliefs, organisational structures and limited financial resources (Ennew et al., 1993; Harris, 1998; Chelariu, Outtarra and Dadzie, 2002).

In the United Kingdom, Hooley, et al. (1990) and Greenley (1995) highlight the importance of the marketing concept to businesses, while Elliot (1990) and Svensson (2008) proffered an answer to the universal applicability of the concept. They propose that the development and application of the concept could be much more effective in a placid and benign business environment, which characterise the post-second world war markets including Nigeria (Mitchell, 1988; Horng and Chen, 1998). However, Svensson (2008) in a study of the best marketing strategies in distinct business environments using a sample of 217 companies from Australia, Singapore, The Netherlands and China, found support for the hypotheses that varying business situations provide apposite market conditions for a customer, competitor or the societal market-oriented strategy. Interest in the implementation of the marketing concept has shifted from the developed world to the developing countries, Nigeria inclusive. This is not unconnected with the rate of economic growth and availability of opportunities in the Nigerian business environment (Kohli and Jaworski, 1990; Narver and Slater, 1990; Osuagwu, 2006; Nwokah, 2008). Hence, market orientation is synonymous with how to implement the marketing concept (Kohli and Jaworski, 1990; Narver and Slater, 1990; Deshpande, Farley and Webster, 1993).

Lafferty and Hult (2001) observe that many of the market orientation studies have been conducted in various single countries and cultures, including Eastern Europe (Bulgaria, Hungary, Poland and Slovenia) (Cox et al., 1998; Marinova, et al., 1993), within developing countries (Gray et al., 1998), Nigeria (Mitchell, 1984, Osuagwu, 2006; Nwokah, 2008; Oniku, 2009), the UK (Greenley, 1995a; 1995b), India (Gaur, Vasudevan and Gaur, 2011), Australia (Atuahene-Gima, 1997; Caruana et al., 1999; Dawes, 2000), Saudi Arabia (Bhuian, 1997), Scandinavia (Selnes et al. (1996), Taiwan (Hou, 2008), Ivory Coast (Chelariu, Quattarra and Dadzie, 2002) and importantly the USA (Kohli and Jaworski, 1990; Narver and Slater, 1990; Jaworski and Kohli, 1993).

Although the market orientation construct has been greeted by a myriad of empirical research, same cannot be said of Nigeria and with the few studies conducted in the country, findings have been inconsistent and inconclusive. This is due to the adoption of varying MO scales, industry studied, stage of development, contrasting cultures and others. It must be noted that far too few MO investigations have adequately factored in the effects of culture and national boundaries (Deshpande and Farley, 1998b; Deshpande et al., 1993;

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Harris, 1996). While it is evident that the culture of a people determines to a reasonable extent their buying behaviours and consequently managerial practice, Kwaku (1997), Horng and Chen (1998), and Caruana, et al. (1999) suggest that regardless of culture, MO directly affects the firm’s performance and due to the proper management of customers' expectations. The culture of a people dictates their tastes and preferences and their managerial behaviours. While the above sounds rather counter-intuitive and paradoxical, the arguments in the marketing domain on the efficacy of the MO continue to take a prominent place in the literature (Tsai, Chou and Kuo, 2008).

Similarly, Day and Wensley (1988), Narver and Slater (1990), Day and Negungadi (1994), draw attention to the need to strike a good balance between the two key components of MO, viz, customer orientation and competitor orientation. Orientation on one firm- stakeholder at the expense of another is not advisable (Deshpande, Farley and Webster, 1993; Chakravarthy, 1996). Houston (1986), Kotler (1997), Slater and Narver (1998, 1999), Ellis (2006) agree that:

(a) The market orientation is not necessarily the best business philosophy for the firm (b) Market orientation is not confined to focus on only the present customers and their expressed needs and wants (Day, 1994b; Slater and Narver, 1998; Kaur and Gupta, 2010) and

(c) A balance must be maintained between market orientation and the creative capabilities, competencies, and objectives of the organization (Houston, 1986; Hamel and Prahalad, 1994, Hou, 2008).

In focusing on customers to the detriment of all other stakeholders of the firm, Gauzente (2002) posits that the optimal level of a firm's market orientation will depend on its nature and age. Which explains why Doyle and Hooley (1992) warn that MO may not be the best form of business philosophy, this implies that tilting towards MO may not yield the immediate business performance results (Kaur and Gupta, 2010). It could be expected that an incubation period might become vital for the organisation to generate the much-needed performance results. Payne (1988) espouses this view and suggests that organisational changes that will institutionalise the MO will require a long-term view of the current and potential customers and competitors and an understanding that developing organisational capabilities might take years of steady work. Management continually needs to highlight the expected culture change, revised work processes, organisational restructuring if need be, new systems, redirected initiatives and other probable causes of action (Day, 1994).

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