Measuring the level of market orientation among financial services providers in a resource-based economy: organizational and customer perspectives

Abstract

Following the pioneering work of Kohli and Jaworski, Narver and Slater, and other academic researchers during the 1990s, the concept of ‘market orientation’ has evolved as an important area of study within the marketing discipline. This work has initiated a large number of empirical studies that have been undertaken during the last two decades. Despite its importance and the attention that this concept has received during the last two decades, most of these studies have conceptualized market orientation and measured its levels within only the Western contexts where it has been developed. Although other studies have been undertaken within newly developed and developing economies, there has been little focus on exploring the concept, its constructs and implementation in less developed and resource-based economies. In order to address this research gap, a mixed-method design was adopted that consisted of two phases. Following a literature survey, the first phase involved a qualitative study to gain better understanding of the notion of market-orientation within a resource-based context and refine the preliminarily conceptual framework based on existing literature and Deshpandé’s definition of market-orientation. In the second phase, this framework was tested by means of a survey of both financial services providers and their customers. Confirmatory factor analysis (CFA) and structural equation modelling (SEM) were employed to analyse the survey responses. The models showed a good fit to the data and good convergent, nomological and discriminant validity, reliability and stability, demonstrating improvement to existing scales by the addition of further salient items elicited from the qualitative phase. The findings of this study identified four constructs of market-orientation in financial services providers within a resource-based economy, viz. market-oriented corporate culture, strategy formulated and implemented, structure and systems employed, and market-oriented activities. Those dimensions (constructs) were consistent with various previous works in the market-orientation literature. Additionally, the study found that a market-oriented corporate culture had a mediating role in facilitating the business organizations’ responses through the strategy formulated and implemented.A key contribution of this research was to offer a robust model that explained market-orientation within a resource-based economy and demonstrated that a market-oriented corporate culture had a mediating effect on facilitating financial services providers’ responses to satisfying customer needs and expectations. The use of a qualitative approach to identify market-orientation dimensions in this context was also considered a methodological contribution in this area of marketing research. Moreover, the present study added a novel perspective to the body of market-orientation literature and suggested directions for future research. Finally, the study provided managerial implications for financial services managers to identify what they should do to become more market-oriented businesses or to enhance their level of market-orientation in order to meet their businesses’ needs and customers’ expectations.