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What Does Marketing Orientation Mean in Practice?
Some Empirical Evidence
by 1 Dr. George J. Avlonitis Dr. Spiros P. Gounaris Dr. Nikolaos Papavasiliou Professor of Marketing Lecturer of Marketing As. Professor of Marketing
1. Introduction
The concept of marketing orientation has been the focus of several research efforts. How- ever, most of these empirical studies that have addressed the issue, mainly attempted to investigate for a possible relationship between marketing orientation adoption and company performance.
More specifically, taking either a behavioural (Narver and Slater 1989, Kohli and Ja- worski 1992, Diamantopoulos and Hart 1993, Greenlay 1995) or a cultural (Hooley et. al.
- posture regarding the meaning of marketing orientation, researchers in the field of mar- keting examined for a possible association between marketing orientation development and the company’s financial performance. As a consequence, a significant body of literature was developed that pointed to the positive effect that is exercised on the company’s financial posi- tion when fostering a marketing oriented approach in business.
However, little attempt has been made to collect empirical evidence that demonstrate how marketing orientation differs from other business orientations in daily business practices. This
is probably due to the eagerness to provide a conceptualisation of marketing orientation and to substantiate with empirical evidence its association with company performance, In fact, with the notable exemption of the work of Hooley et. al. (1989), no empirical evidence exists that could provide a clarification of how marketing orientation is actually attained in practice. Having identified this gap in literature, this paper attempts to provide an insight on how mar- keting orientation is actually implemented in practice.
2. A Conceptual Framework of the Marketing Process
Most marketing textbooks (Kotler 1997, Dibb et. al. 1997, Tull and Kahle 1990) follow a more or less similar structure. After some introductory chapters on the importance of market- ing, they continue with the importance of strategic marketing planning for shaping the company’s future, they present the consequent need to understand the market the company operates, they carry on with the explication of the importance of market segmentation and ex- plain how a company selects and targets specific market segments. Following that, they present the most fundamental decisions the company needs to take with regard to the overall marketing strategy and the marketing mix, then the aspects of implementation of these strate- gic decisions are offered and they conclude with the concept of controlling the marketing function.
Figure 1: A Conceptual Framework of the Marketing Process
(^1) Authors contact Address: Athens University of Economics & Business Science, Department of Manage- ment Science & Marketing, 76 Patission Street, ATHENS, 104 34, GREECE
MARKETINGSTRATEGIC PLANNING AVAILABILITYOF MARKET INTELLIGENCEBASED IDENTIFYMARKET CATER THEMSEGMENTS & MARKETINGDESIGN STRATEGIES
MARKETINGCONTROL
IMPLEMENTATIONMARKETING
marketing orientation (Kohli and Jaworski 1990, Shapiro 1988), market research becomes the major source through which this information is developed (Blankenship and Breen 1992).
However, simply researching the customers’ needs and wants and trying to understand how they change over time is not enough. Marketing orientation requires that the entire com- pany is mobilised to satisfy these needs and wants. Hence, availability of the information on customers' needs and wants at a company – wide level becomes a mandate for marketing ori- entation development (Narver and Slater 1989). Hence, we suggest that:
H2: Marketing oriented companies, in contrast with the non-marketing oriented ones, are heavier users of market research, and H3: Marketing oriented companies, as opposed to non-marketing oriented ones, are more inclined to permeate such information throughout the organisation
3.3 Identify Market Segments and Cater Them
Understanding the customers’ needs and wants induce companies to realise that no two individuals are ever exactly the same. This heterogeneity in needs and wants drives compa- nies to search for and identify groups of consumers with rather homogeneous needs and expectations which, when aggregated, they represent potential target markets that the com- pany may attempt to service profitably (Dibb et. al. 1994).
Having the satisfaction of the customers’ needs as the primary objective, and possessing the necessary information as to the nature of these needs and wants, the company is able to plan ahead as to which of these segments will eventually cater and how. In doing so, it devel- ops a market segmentation strategy (Kotler 1997). In this respect, Baker et. al. (1986) have pointed to the need of developing a marketing strategy for delivering customer satisfaction through efforts that nurture pre-specified demands while Hooley, Lynch and Speherd (1990), have shown how marketing oriented companies attempt to create “competitive space” in order to create customer value and sustainable profitability. Besides, both empirically derived and normative work has substantiated the positive effect of implementing strategies of market segmentation in customer satisfaction and profitability (Peters and Waterman R 1982, Cha- ganti and Chaganti, 1983, Brooksbank 1990 and 1991) while Doyle and Wong (1998) have shown that professional marketing accentuates the use of a systematic approach to market segmentation. On these grounds we expect that:
H4: Marketing Oriented companies, in contrast with the non-marketing oriented ones, make conscientious efforts to identify market segments and cater for their needs.
3.4 Design Marketing Strategies However, putting marketing orientation in practice requires specific strategic outcomes that are reflected upon the company’s marketing mix. Baker et. al. (1986) assert that having acquired the necessary market information, several aspects of the company’s strategic deci- sions can be influenced. These are, product portfolio, pricing and promotional decisions.
Starting with the product portfolio decisions, for marketing oriented companies continu- ous innovation and new product development is a key activity in managing their product portfolio. In fact, marketing oriented companies are more likely to emphasise continuous in- novation and new product development (Witcher B, 1985). On the other hand, it is has been established that marketing orientation has a positive impact on the performance of a new product in the market and its acceptability by the company’s customers (Gima 1995).
In the same pattern are also the findings of Cooper and Kleinschmidt (1987) who have heavily researched the success factors of new product development. Their work has shown that many of the factors underlying the success of new product are associated with the com- pany’s ability to understand the needs of the market and cater for them (“goodness-of-fit” factor of success). On this reasoning we expect that:
H5: In selecting new products for introduction into the market place, marketing oriented companies, in contrast with the non-marketing oriented ones, will place more em- phasis on market/customer – related considerations. However, new product development, alone, no longer provide the basis for a competitive edge (Butz and Goodstein, 1996). Instead, what everyone seems to agree on is the need of creating a customer value delivery approach, provided of course that the company holds the required information that allows the understanding of its market (Narver and Slater 1989, Gale 1994). In delivering customer value, two blocks of issues must be addressed: The value the company creates through its products, services, image, and personnel and the cost the cus- tomer has to suffer for obtaining this value (Kotler 1997). A central variable associated with the cost the customer suffers is the company’s pricing strategy for its products or services. Apparently, the latter has to be in congruence with the customers’ perception of the value the company offers. Yet, most of the companies still adopt different aspects of a cost-plus ap- proach in pricing their products or services (J. Winkler 1992). Such practices may be the
sume that the key role in developing market-oriented strategic plans and ensuring that these plans reflect the market conditions as well as the needs and wants of the customers must be played primarily by the Chief Marketing Executive (Lear 1963). On these grounds we expect that:
H8: In Marketing Oriented companies, as opposed to non-marketing oriented ones, the Marketing/Sales Department plays a leading role in strategic planning. The execution of the strategic plan requires that several marketing tasks are carried out. Hooley et. al. (1989) have suggested that marketing oriented companies are inclined to allow the Marketing/Sales Department to maintain a larger number of marketing tasks – activities under its direct authority and control. Hence, we would expect that:
H9: In Marketing Oriented companies, in contrast with the non-marketing oriented ones, a larger number of marketing tasks – activities will be under the control of the Mar- keting/Sales Department. In conceptualising the marketing orientation concept, Narver and Slater (1989) did so on a triangular basis: Customer focus, Competitor focus and Departmental Co-ordination. Within this framework, when the entire company embraces the marketing orientation concept, the various functional departments are be expected to work closely and harmonically with the Marketing/Sales Department to create satisfaction (Witcher 1990). This echoes the call by Kotler (1997) for welding the entire company towards the objective of meeting customers’ needs and wants. Hence, we expect that:
H10: In Marketing Oriented companies, as opposed to non-marketing oriented ones, or- ganisational structures will warrant a higher degree of co-ordination between the Marketing/Sales Department and the other functional departments.
3.6 Marketing Control
Any introductory text-book in management would stress the importance of controlling the implementation of any given task. McDonald and Leppard (1993) as well as Kotler (1997) present various techniques of controlling the marketing function and practices. They both suggest that a Management Information System (MIS), which is capable of analysing market- ing information and provide the company with the necessary feedback for marketing controlling purposes, is required. Most companies would not hesitate to assert the ability of their MIS to provide them with information that allows them to control their activities.
According to Turner (1991), except from the information that relates to financial indices and financial performance, the company also needs to generate customer-related and competi- tion-related intelligence. Such information allows the company to gain a more holistic and dynamic depiction of its present condition, monitor deviations from its strategic marketing objectives and develop corrective actions. This kind of information can be generated from the company’s own records (Traynor and S. Traynor 1989, Taylor 1992, Kotler 1997), provided that the company has ensured that its MIS monitors such intelligence. On these grounds we expect that:
H11: Marketing Oriented companies, as opposed to non-marketing oriented ones, will build their MIS giving more emphasis on its ability to generate customer- and mar- ket-based intelligence. Certainly, intelligence generation alone does not complete the control function. The no- tion of control encompasses the implementation of corrective actions, when necessary, in order to eliminate deviations from the primary strategic objectives and maintain convergence to the company’s goals. Within this framework, Narver and Slater (1990) have long postu- lated responsiveness to intelligence as a central notion of the marketing orientation concept. Hence, we expect that:
H12: Marketing Oriented companies, as opposed to non-marketing oriented ones, will show greater responsiveness to the intelligence generated by their MIS.
4. Research Methodology
4.1 Sample and Data Collection Method
The hypotheses put forward in this paper were assessed against data from 444 Greek companies as part of a much wider examination of marketing attitudes and practices in Greece. For that purpose, a cross sectional sample was chosen with the intention to increase the generalisability of the findings. At the same time, it was necessary that certain marketing skills should be present among the companies in the sample. Thus, we ensured that larger companies would be adequately represented in the sample since, it was felt that, the larger the company the higher the probability to possess these skills. Consequently, the sample was de- fined to comprise the following companies:
x all manufacturing companies with more than 40 employees (n=1,843)
the Sales Manager where a Marketing Manager did not exist) was the appropriate person to contact. The choice to use the single respondent approach was compelled by both the size of the sample and the respondent’s familiarity with the research topic and the information sought. The large size of the sample rendered the mailing of additional questionnaires to more re- spondents per company prohibitive in financial terms. Besides, similar studies in the broader field of marketing have also employed the key respondent approach without any flaws to the reliability of the data (Narver and Slater 1989, Donaldson 1995). 4.2 Variables Measurement 4.2.1 Measurement of Marketing Orientation In order to measure the respondents’ level of marketing orientation adoption, they were presented with the 15 statements that Hooley et. al. (1989) have found to adequately describe different attitudinal approaches to marketing. Then, using a Likert scale (1=«I Fully Dis- agree» to 5=«I Fully Agree») they were asked to indicate the degree of agreement or disagreement with each statement. As it has been reported elsewhere (Avlonitis and Gounaris 1997), the analysis of the 15 statements, using factor and cluster analysis resulted in five clus- ters presented in Table 1. According to the data presented in Table 1, the Marketing Oriented companies appear to believe that marketing is primarily a company culture with a priority in satisfying customers’ needs while encompassing certain activities, such as collecting market information and intel- ligence on competitors, so that the company can adapt to the market and offer customer satisfaction. For these companies, creating relations with customers helps in better understanding their needs while, proper product positioning and product image improves their ability to satisfy more than the core need (e.g. psychological needs, social needs etc.).
Table 1: Company Profiles Based on Company’s Attitudes Towards Marketing Variables (% of Companies, n=444)
MarketingOriented (24,2%) Oriented^ Product (20,2%) Oriented^ Sales (14,5%)
ProductionOriented (11,5%)^ Agnostics (29,6%) F^ Sign. Marketing is … x SUPPORTING SALES (3,084) 4,025 [4,526] 3,888 [4,353] 28,790 0, x PROMOTING PRODUCTS (2,894) 3,367 3,929 3,733 [4,086] 22,168 0, x SATISFYING CUSTOMERS’ NEEDS [4,705] 4,291 (3,421) 4,405 4,396 41,388 0, x BETTER LEFT IN SALES & MARKETING DPTs
(2,852) (3,088) [3,842] 3,288 3,594 10,482 0, x MARKET ANALYSIS [4,357]^ [4,468]^ (3,350)^ 3,977^ 4,267^ 23,206^ 0, x NOT EXISTENT (1,315)^ 2,329^ 2,245^ (1,666)^ [3,034]^ 46,214^ 0,
x A COMPANY CULTURE [4,094] (2,835) (2,175) 3,650 3,267 38,491 0, x BUILD PRODUCT POSITIONING & IMAGE
[4,126] (3,075) 3,631 3,800 3,775 14,909 0, x DESIGN & PRODUCTIONMANAGEMENT 2,789^ [3,758]^ 2,245^ [3,706]^ (1,873)^ 51,512^ 0, x DECISIONS ON PRODUCTIONQUALITY & QUANTITY 3,452^ [3,974] (2,473)^ [3,841} (2,519)^ 34,033 0, x MAINTAIN CUSTOMERS CONTACTS 3,200 2,265 [4,105] (1,911) 3,732 61,436 0, x INTELLIGENCE ON COMPETITION [4,210] 3,949 (3,140) (2,666) 3,965 34,692 0, x ADAPT TO THE MARKET [4,378] 4,139 (3,333) (3,111) 4,163 29,687 0, x CREATE CUSTOMER RELATIONS [4,126] (2,949) [4,263] (2,688) 3,956 48,237 0, x Figures represent the average of each variable in each cluster. Maximum values are in brackets while minimum in parentheses (based on Duncan’s multiple range test, A CONFUSING CONCEPT (1,663) 2,493 2,877 (1,666) [3,163] 34,875 0, p<0,10). Significance level is based on one-way analysis of variance The second cluster consists of Product Oriented companies. These companies emphasise on collecting market information for the purpose of managing the production and taking deci- sions regarding the quality and the quantity of the production. Nonetheless, no particular emphasis is placed on associating these efforts with the objective of offering satisfaction to specific customer’s needs. Hence, they seem to fit the definition of “product orientation” offered by Kotler (1997), i.e. gaining a competitive advantage through attempts to increase the attraction of the product (e.g. additional features, use of modern technology), while ne- glecting to specify customer’s needs and a manner to serve these specific needs better than competition. Sales Oriented companies perceive marketing as a sales-support function which is better left to the Marketing/Sales department(s). They also neglect any analysis of the market and reject marketing as a company culture. Sales Oriented companies try to create relationships with their customers and maintain regular contacts not as means of increasing their under- standing of their customers’ needs but rather as a way to increase the effectiveness of their sales effort. The fourth cluster consists of the Production Oriented companies. These companies hold the attitude that their marketing effort should focus on decisions regarding the management of their production process and the quality and the quantities of the production output. They see no benefits in engaging with activities such as market analysis, collecting intelligence from competitors and adapting to market conditions. Finally, the fifth cluster, Agnostics, describes those companies which have a general picture of marketing as something that has to do with the sales function. In general, marketing remains a confusing concept to them that they do not apply to their business activities.
As far as the pricing decisions are concerned we focused on the methods the companies use to decide on pricing issues and asked the respondents to indicate whether their pricing strategy is predominately designed (a) “On a Cost Plus Basis”, (b) “On What the Competi- tors Charge Basis”, and (c) “On What the Market Can Bear Basis ”.
Table 2: New Product Development Criteria – Factor Analysis Factors Variables Loadings F1: N.P.D. Masrket NEEDS OF TARGET MARKET (3,255) 0, Considerations GROWTH OF TARGET MARKET (3,172) 0, (25,2% of variation) COMPANY STRATEGIC OBJECTIVES (3,182) 0, TARGET MARKET ECONOMIC ABILITY TO BUY (3,244) 0, PRODUCT CANIBALISATION (2,852) 0, TRENDS IN FOREIGN MARKETS (2,765) 0, F2: N.P.D. CompetitiveConsiderations PRODUCT IMMITABILITYCOMPETITIVE REACTIONS (2,489)(2,603) 0,8910, (12,3% of variation) INNOVATIVE CHARACTERISTICS (3,116) 0, F3: N.P.D. FinancialConsiderations ABILITY TO SELF-FINANCEEXTERNAL FINANCING (3,000)(2,744) 0,8120, (8,4% of variation) LEVEL OF TOTAL INVESTMENT (3,260) 0, ABILITY TO PRODUCE WITH CURRENT CAPACITY (3,229) 0, F4: N.P.D. Economic LEVEL OF TOTAL INVESTMENT (3,260) 0, Performance Considerations LEVEL OF EXPECTED RETURN (3,554) 0, (7,6% of variation) LEVEL OF EXPECTED SALES (3,605) 0, Kaiser-Meyer-Olkin Measure of Sampling Adequacy = 0,757, Bartlett Test of Sphericity = 1221,606, sign = 0,000. Numbers in paren- thesis indicate the items’ mean value in the sample Finally, with regard to promotional decisions, the focus was on the methods that the companies of the sample use to decide their promotional budget: More specifically, we asked the respondents to indicate whether their promotional budget is predominately (a) “Based on previous experience”, (b) “Reflecting their Economic Ability”, (c) “Set as a Percentage of Sales”, (d) “Designed to maintain Parity to Competitors’ Spending” and (e) “Dependent on the Products’ Objectives”.
4.2.6 Marketing Implementation
The evaluation of the Marketing/Sales Department contribution to the company’s strate- gic planning was achieved by asking respondents to indicate the role that the Department of Marketing/Sales, vs. the other Departments of the company, plays in their strategic planning process by using a 4-point scale (1 = “Little or none”, 2 = “Provides Feedback”, 3 = “Equally to the Other Departments” and 4 = “Leading”) (mean = 2,78, Stand. Deviation = 0,79).
The number of marketing tasks – activities for which the Marketing/Sales Department actually holds responsibility was measured by building an extensive list of 16 marketing tasks and asking the respondents to indicate which functional department ( Production, R&D, Mar-
keting/Sales, Finance, Personnel, Purchasing, Administration, Data Processing & Software Development ) holds the main responsibility. Then, for each company, we calculated the sum of activities (ranging from 0 to 16) for which the Marketing/Sales Department holds the re- sponsibility (mean = 3,51, Stand. Deviation = 3,83).
As far as the degree of co-ordination between the Marketing/Sales Department and the company’s other departments is concerned, we asked the respondents to indicate, using a 5- point scale raging from 1 ( “Low” ) to 5 ( “High” ), how well the Department of Market- ing/Sales co-operates with the other functional departments of the company. Then, for each company we calculated the average degree of co-ordination as the result of the sum of the de- gree of co-ordination between Marketing/Sales and each individual department divided by the number of functional departments the company maintained (mean = 3,65, Stand. Deviation = 0,70).
4.2.7 Marketing Control As we have already mentioned, with regard to marketing control the focus is on the dimensions that the company’s MIS covers and the extent to which the company exhibits responsiveness to the information generated by the MIS and takes corrective actions.
With regard to the dimensions covered by the MIS, we presented the respondents with a list of 24 topics that a Management Information System may cover and asked them to indi- cate, using a 4-point scale ( ranging from 1 = “Minimum Informed” to 4 = “Very Well Informed” ), how well informed they are about these topics. Their answers were factor ana- lysed and this analysis produced 5 distinct areas – topics of information: Customer Related information, Competition Related information, Market Environment Related information, Sales Force and Promotion Related information and Product Related information (see Table 3). Again, factor scores were calculated and used in subsequent analysis.
5.1 Strategic Marketing Planning From Table 4 it is clear that Marketing Oriented companies place a greater emphasis and make more systematic use of strategic marketing plans. On the contrary, Sales Oriented, Ag- nostics and Product Oriented companies are the ones which are the least concerned with developing such plans. Hence, we accept H1.
Table 4: Emphasis on Strategic Marketing Planning – ANOVA Marketing Oriented
Product Ori- ented
Sales Ori- ented
Production Emphasis on Strategic Marketing Planning Oriented^ Agnostics^ F^ Sig. [3,141] (2,215)^ (1,952)^ 2,906^ (2,079)^ 19,094^ 0, Figures represent the mean of each variable in each cluster. Maximum values are in brackets while minimum in parentheses (based on Duncan’s multiple range test,p<0,10). Significance level is based on one-way analysis of variance
5.2 Availability of Market Based Intelligence Table 5 summarises the results of the analysis we performed concerning the availability of market based intelligence, i.e. the use of market research and the degree of market informa- tion dissemination at a company – wide level. The results presented in Table 5 clearly show the heavier use of market research by the Marketing Oriented companies.
Table 5: Use of Market Research and Intelligence Dissemination - ANOVA MarketingOriented Product Ori-ented Sales Oriented ProductionOriented Agnostics F Sig. Use of Market Research [2,371] 1,835 (1,476) 1,981 1,772 9,421 0, Intelligence Dissemina- tion
[4,125] 3,890 (3,014) 3,544 3,341 14,726 0, Figures represent the mean of each variable in each cluster. Maximum values are in brackets while minimum in parentheses (based on Duncan’smultiple range test, p<0,10). Significance level is based on one-way analysis of variance From Table 5 it can also be seen that Marketing Oriented companies are more inclined in disseminating this information at a company-wide level. These findings support the notion that marketing oriented companies are more inclined in collecting market-based information and in disseminating this information at a company-wide level so that the entire company be- comes aware of the market conditions and gains strategic insights concerning the behaviour required to adapt to the market. On these grounds, H2 and H3 are accepted. 5.3 Identify Market Segments and Cater Them The analysis concerning the identification of market segments and the use of market segmentation strategies in catering for their needs is presented in Table 6.
Table 6: Use of Market Segmentation Strategies – ANOVA Marketing Oriented
Product Ori- ented
Production Oriented
Sales Ori- ented Agnostics F Sig.
Use of Market Segmentation [2,313] 2,118 2,108 (1,533) 1,827 10,093 0, Figures represent the mean of each variable in each cluster. Maximum values are in brackets while minimum in parentheses (based on Duncan’smultiple range test, p<0,10). Significance level is based on one-way analysis of variance It is clear that the Marketing Oriented companies place more emphasis in segmenting their markets and tailoring an appropriate marketing mix for each target-segment. On the con- trary, market segmentation is least used by the Sales Oriented companies. On these grounds we accept H4. 5.4 Marketing Strategy Design 5.4.1 Product Portfolio Decisions The analysis regarding the criteria used in deciding whether or not to introduce a new product into the market place is presented in Table 7. It is clear that Marketing Oriented com- panies are, more than any other type of company, focusing on Market Considerations, along with Economic Performance Considerations when deciding to introduce a new product.
Table 7: Criteria Employed in Deciding the Commercialisation of a New Product
- ANOVA
New Product Development Criteria
Marketing Oriented
Product Ori- ented
Production Market Considerations Oriented^ Sales Oriented^ Agnostics^ F^ Sig. [0,454] -0,037^ 0,168^ -(0,597)^ -0,011^ 9,872^ 0, Competitiveness Considerations 0,168 -0,031 0,089 -0,124 -0,073 0,939 0, Financial Considerations -(0,211) -0,002 -0,011 0,129 0,086 1,205 0, Economic Performance Considerations [0,155] 0,011 0,080 -(0,203) -(0,053) 3,777 0, Figures represent the mean (factor score) of each variable in each cluster. Maximum values are in brackets while minimum in parentheses (based on Duncan’smultiple range test, p<0,10). Significance level is based on one-way analysis of variance
On the contrary, Sales Oriented companies are the ones who are the least concerned with such criteria. Interestingly enough, the Competitive Considerations is of equal importance to all type of companies while Financial Considerations which are referring to the financial sup- port required by the product are important for all but the Marketing Oriented companies, probably due to their financial strength which results from their market performance. To summarise, the findings presented in Table 7 show that Marketing Oriented compa- nies are the only ones that place increased emphasis on market considerations when evaluating new products and on this basis we accept H5. 5.4.2 Pricing and Advertising Decisions The findings presented in Table 8 show the results of the analysis we performed in order to investigate whether any significant differences existed in the methods employed by compa- nies with different orientation when deciding setting their prices and their promotional budget.
Activities Monitored By the Marketing/SalesDepartment (2,506) (2,436) (2,186) 4,622 [6,439] 15,270 0, Co-ordination Between Departments 3,575 [3,830] 3,579 (3,385) [3,890] 2,668 0, Figures represent the mean of each variable in each cluster. Maximum values are in brackets while minimum in parentheses (based on Duncan’s multiple rangetest, p<0,10). Significance level is based on one-way analysis of variance
From the results presented in Table 9 is clear that the Marketing Oriented companies are the ones that actually allow the Department of Marketing/Sales to lead the process of strategic planning. In the same direction are also the findings pertaining to the number of marketing activities for which the Marketing/Sales Department holds the main responsibility of execu- tion: In the Marketing Oriented companies, a larger number of marketing activities is indeed under the direct control of the Marketing/Sales Department. On these grounds H8 and H9 are accepted. Nonetheless, hypothesis H10 seems to be only partially supported by the data. As it can be seen from Table 9, the Marketing Oriented companies have indeed succeeded in co- ordinating the company’s functional Departments with that of Marketing/Sales. However, the Production Oriented companies are found to have an equally high degree of co-ordination. Because the Marketing/Sales Department of the Production Oriented companies is literally deprived from authority over a significant number of marketing tasks, it appears that it is a Department of little power within the company’s hierarchy and, hence, it is forced to work in co-ordination with the Department that actually leads the company’s strategic direction, pos- sibly the Production Department. This is not a major surprise. Indeed, Narver and Slater (1989) have shown that co- ordination is not a prerequisite of marketing orientation. This research has come to the same conclusion since the extent of co-ordination between the Marketing/Sales Department with the other functional departments is a characteristic of the Marketing Oriented companies but other company orientations achieve similarly high levels of co-ordination, although within a different context 5.6 Marketing Control Finally, Table 10 summarises the analysis we carried out in order to investigate the em- phasis placed by the company’s MIS regarding different topics of information as well as the company’s responsiveness to this information.
Table 10: Information Generated by the MIS and Company Responsiveness – ANOVA Agnostics
Production Oriented
Sales Oriented
Product Oriented
Marketing Oriented F Sig.
Information Generated by the MIS x Customer Related Information -(0,083) -0,014 -0,441 0,067 [0,352] 5,138 0, x Competition Related Information -(0,336)^ 0,175^ -0,083^ -0,008^ 0,261^ 4,875^ 0, x Market Environment Related Information
-(0,335) -(0,113) -(0,370) 0,252 [0,549] 10,789 0, x Sales Force and Promotion Related Information
-(0,249) 0,380 0,274 -0,178 0,168 5,315 0, x Product Related Information -(0,019)^ 0,099^ -(0,326)^ [0,177]^ [0,141]^ 2,039^ 0, Response to Intelligence 3,094 3,290 2,758 3,705 [4,195] 16,902 0, Figures represent the mean (factor score) of each variable in each cluster. Maximum values are in brackets while minimum in parentheses(based on Duncan’s multiple range test, p<0,10). Significance level is based on one-way analysis of variance From Table 10 it is clear that the Marketing Oriented companies are the ones which have designed their MIS to provide intelligence on customer and market issues. This is apparently not the case with companies of different orientation. On this basis we accept H11.
Similarly, Marketing Oriented companies are also the ones that are characterised by the greatest responsiveness to the intelligence they collect and, on this basis, we also accept H12.
6. Discussion, Limitations and Future Research
The data presented in this paper help to explain the findings presented in the literature (Narver and Slater 1989, Hooley, Lynch and Shepherd 1989, Kohli and Jaworski 1992, Dia- mantopoulos and Hart 1993, Greenlay 1995, Avlonitis and Gounaris 1997) which demonstrate a positive association between marketing orientation adoption and company per- formance.
As the analysis has shown, Marketing Orientation in practice can be perceived as a se- quence of necessary actions that must guide the behaviour of a marketing oriented company.
The first action in this sequence appears to be the design of a strategic marketing plan which aims to ensure that the entire company adopts a single, coherent, direction which leads to the achievement of the company’s corporate strategic objectives through the satisfaction of its customers’ needs and adaptation to the market conditions.
For this purpose, ensuring the availability of market based intelligence is critical. As the analysis has shown, this market based intelligence is secured by systematically collecting in- formation concerning the customers’ needs and wants, the competition and all relevant data that a market research study can produce. These studies assist the company in understanding – evaluating the market conditions and its position in the market. Once such information is col- lected the next task is to ensure that the entire company is aware of this information.
