Decomposed Approach of Market Orientation and Marketing Mix Capability: Research on Their Relationships with Firm Performance in the Korean Context

  •  Sohyoun Shin    


The notion that market orientation provides firms a source of competitive advantage seems to be widely accepted since the effects of market orientation on business performance have been extensively researched and many studies have confirmed their affirmative relationships. However, aggregated approach of market orientation as one single construct has left the detailed investigations yet unexplored despite its tremendous contribution in marketing strategy arena. Thus, decomposed properties of market orientation and their relationships with various components of firm success were explored to precisely examine the paths in this study. Furthermore, to resolve conflicting arguments on whether market orientation has a direct influence on firm level consequences, marketing mix capability was suggested as a critical mediator to complete a resource deployment system rather than a resource possession approach, which is equivalent to resource-based view. From an analysis of a survey data of 285 Korean organizations, three dimensions of market orientation, namely customer orientation, competitor orientation, and interfunctional coordination, and four sub-constructs of marketing mix capability, such as product, communication, channel and pricing capability, along with their impacts on business performance were investigated in detail. This study revealed that customer orientation and interfunctional coordination had a direct impact on only customer satisfaction while all three dimensions of market orientation failed to directly link to other firm performance variables like market effectiveness, adaptability, and profitability. To bridge these relationships product and communication capabilities were proven to be a necessary condition while channel capability and pricing capability showed interesting relationships. Findings and implications were discussed and limitations and further research directions were also suggested.

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