1.4 slater narver 1990 the effect of a market orientation on business profitability

Question 1

Market orientation crucial for

Answer 1

sustainable superior value

Question 2

Market orientation is the

Answer 2

organisation culture that is most effectively/efficiently and creates the necessary behaviors for superior value for buyers and, thus, longterm superior performance of the business

Question 3

SCA sustainable competitive advantage is needed for

Answer 3

constantly above normal market performance.

Question 4

SCA logic football

Answer 4

: if buyer purchases football, the perceived expected value of that football exceeds the expected value to him of any alternative solutions of competitors.

Question 5

a market-oriented business continuously examines these

Answer 5

alternative sources of SCA to see how it can be most effective in creating sustainable superior value for its consumers and maintain a long-run performance.

Question 6

Market orientation as culture

Answer 6

Set of beliefs that put the customers’ interest first; while not excluding that of all other stakeholders, such as owners, managers and employees, in order to develop a long-term profitable enterprise

Question 7

the three behavioral components of a market orientation comprehend the activities of (3)

Answer 7

activities of market information acquisition (verwerving) and dissemination(verspreiding) and the creation of customer value.

Question 8

Customer orientation and competitor include all of the activities involved in orientation include (2)

Answer 8

acquiring information about the buyers and competitors in the target market and disseminating (verspreiden) it throughout the business(es)

Question 9

3 behavioural components of MO

Answer 9

customer orientation, competitor orientation
interfunctional coordination

Question 10

what do you do in customer orientation

Answer 10

– acquiring (Werven van) information about buyers and spreading the findings throughout the company.

Question 11

how do you create value in customer orientation?

Answer 11

o Create value through e.g. increasing benefits in relation to the buyers’ costs

Question 12

main goal of customer orienattion

Answer 12

o Understanding target buyers → able to create superior value for them.

Question 13

main goal of customer orienattion

Answer 13

o Understanding target buyers → able to create superior value for them.

Question 14

what to do in competitor orientation

Answer 14

understand short-term strengths and weaknesses, longterm capabilities and strategies of the key competitors.

Question 15

Inter-functional coordination: is based on

Answer 15

the customer/competitor information and comprises(omvatten) the business’s efforts, typically involving more employess than the marketing department, to create superior value for the buyer

Question 16

how to create value (interfunctional coordination)

Answer 16

. Incorporate all parts of a business in the marketing strategy. Create value at different points in the buyer’s journey .

Question 17

And 2 decision criteria for mo

Answer 17

1. Long-term focus: literature suggests that MO has primarily a long-term focus, both in relation to profits + implementing each of the three behavioural components.
2. Profitability: literature suggests that for businesses the most important objective in a MO is profitability.

Question 18

Market orientation as behaviour:

Answer 18

Ability to generate, disseminate( verspreiden) and use superior information about customers and competitiors.

Question 19

commodity business

Answer 19

physical products, all of which are essentially identical in quality and performance of those competitors.
- Must add various customer benefits to the product or reduce costs

Question 20

Non-commodity

Answer 20

: can adapt product or service for more customer value.

Question 21

What are the main outcome

Answer 21

substantial positive effect of market orientation on business profitability.

Question 22

• Effect of MO on business profitability depends on industry through
  o Non-commodity

Answer 22

effect is a linear / straight relationship → the higher MO, the higher profitability → market orientation: yes.

Question 23

• Effect of MO on business profitability depends on industry through
  o commodity

Answer 23

u-shape → commodity business can initiate value-increasing programs, however in commodity markets it’s difficult to differentiate.
 No MO + high MO have high profitability, in-the-middle not.
 Low MO: focus on efficiency, compete on price (e.g. sugar, lumber etc)
 High MO: highest profitability (e.g. coffee)

Question 24

Effect of Market Orientation over time: 3

Answer 24

• Effect of MO on profit reduce over time
• More and more companies are investing in MO, so it becomes harder
• Does this mean market orientation has become obsolete
  o No, it has become a standard; needed to be able to compete