Market Orientation in Pakistani Companies

PAKISTAN BUSINESS REVIEW APRIL 2011 106

Research Market Orientationi in Pakistani Companies

MARKET ORIENTATION INPAKISTANI COMPANIES

Samin AhmadDepartment of Marketing

College of Business Management, Karachi

Introduction

Marketing simply defined is a value exchange process.The firms aim to delight the customers and the shareholders atthe same time. In this context the concept of Market Orientation(MO) was developed in the 1990s, which has led to substantialresearch and is a theory which states that the sole objective ofan organization is to be totally focused on the market, and allother activities like corporate culture, internal distinctivecapabilities etc. automatically follow in line. Kohli and Jaworski(1990) have done pioneering work in this area. They define MOas: “the organization wide generation of market intelligencepertaining to current and future customer needs, disseminationof intelligence across departments, and organization wideresponsiveness to it”. MO is an essential construct of healthybusiness firms competing in highly demanding and sophisticatedmodern economies. The meaning and importance of MO hasbeen studied extensively in the for-profit sector (e.g., Kohli &Jaworski, 1990; Narver & Slater, 1990).

Market-oriented firms follow specific and identifiableroutines and processes, such as generating information aboutcustomers through monitoring and assessing their changing needsand wants, disseminating that information throughout the firm, andrevising business strategies to enhance customer value (Kohli andJaworski 1990; Narver and Slater 1990). By definition, marketorientation describes such actions as listening to customers anddelivering solutions on the basis of the interests and wants of thecustomers ( Desphandé, Farley, and Webster 1993; Slater and Narver1995).

Research

107 PAKISTAN BUSINESS REVIEW APRIL 2011

ResearchMarket Orientation in Pakistani Companies

The essence of market orientation is the successfulmanagement of a relationship between suppliers and customers.For an organization to attain super normal performanceconsistently, it must create a Sustainable Competitive Advantage(SCA). This SCA comes from creating superior value for customers,and the desire to create this superior value in turn drives thebusiness to be market oriented. We start with a review of selectedcontemporary literature review that helps us develop ourhypothesis for this research.

Literature review

As the academic field of marketing developed in the firsthalf of the 20th century, the marketing concept became a unifyingdescription of a preferred company culture. The marketing conceptsuggests that marketing is a general management responsibility,not just a responsibility of the marketing department and,consequently, meeting customer needs profitably should be anoverriding priority for the entire organization (Webster, 1988).

Organizations that have embraced the concept seek tounderstand consumers and in turn develop products and servicesthat meet consumer needs and wants better than competitors.The evolution and development of the marketing concepteventually caused researchers to begin investigating what is todayknown as “Market Orientation.”

Initial efforts by Kohli and Jaworski (1990) and Narverand Slater (1990) began a concentrated effort in the marketingfield to better measure and understand the market orientationphenomenon. Much of these and other early efforts concentratedon determining the impact of market orientation on variousmeasures of a firm’s performance. As the understanding of marketorientation has increased, researchers have attempted to betterdiscern the complex relationships among market orientation, firmperformance, and a range of other constructs, such as innovation(Han, Kim, & Srivastava, 1998), entrepreneurship (Hurley &Hult,1998; Matsuno,Mentzer, & Rentz, 2000), and the learningorganization (Hurley & Hult, 1998; Slater & Narver 1995). Studies



have shown that marketing orientation is also related toorganizational performance in a variety of industries (Han,Kim,and Srivastava 1998; Kumar, Subramanian, and Yauger 1997;Narver and Slater 1990; Raju, Lonial, and Gupta 1995; Raju et al.2000).

Researchers have recognized that there are manymarketing/customer related variables, such as customersatisfaction, customer loyalty, and customer retention thatmediate the quality performance relationship. Many of thesevariables are either encompassed within or closely aligned withthe MO of an organization. Marketing Orientation, therefore,offers us a more parsimonious way to incorporate many of themarket/customer related variables that are part of the quality-performance framework. (P. S. Raju and Subhash C. Lonial.2001).

An overview of the available literature indicates thepresence of a robust MO-performance relationship thatgeneralizes across diverse global markets/countries. Yet, thestrength of its impact depends on the country setting. MO mayhave its greatest effect in nations where high standards ofconsumer service and expectations are still evolving (AvivShoham, Ayalla Ruvio, Eran Vigoda-Gadot and NitzaSchwabsky,.2006).

The impact of MO on organizational performance andoutcomes has been studied mainly in the for-profit sector inmany countries and across contexts. Two theoretical approachesto MO have been used widely. The first approach generallyaccepted as the “behavioral-based scale”, was presented byKohli and Jaworski (1990) and later developed by Kohli, Jaworski,and Kumar (1993). It suggests that MO includes generation ofmarket information, cross-departmental dissemination ofinformation, and responsiveness to disseminated information.According to the second scale, which is more of a “culturalbased” approach market orientation approach (Narver & Slater,1990; Slater & Narver, 1996), MO includes customer orientation,competitor orientation, and inter-functional coordination.



Taking a holistic view one sees across the globe a majordevelopment of a shift toward customer-focused organizationalstructures which have been investigated in great detail byChristian Homburg, John P. Workman, Jr. & Ove Jensen.

Voices have been raised to suggest that a firm’scompetitive advantage is a function of not only the firm’soperating environment but also of its internal dynamiccapabilities (Porter 1991). Some researchers have described MOas largely the result of company culture (Hurley & Hult, 1998;Kohli & Jaworski, 1990; Narver & Slater, 1990; Slater & Narver,1998, 1999). These researchers see MO as :

1. A focus on customers through understanding theirinterests and needs, providing value to customers (financialand other), and consistently striving for high levels of customersatisfaction;

2. A focus on competitors that includes continuallyevaluating the competitive landscape for developing andpresenting competitive threats and opportunities and routinelydiscussing competitor strengths and weaknesses

3. Inter-functional coordination that integrates anddirects all members of the firm in addressing the aforementionedwhile meeting customer needs better than competitors.

A customer-focused culture is a prerequisite for market-oriented organizations. In essence, market orientation may bedescribed as a link between an organizations’ culture and itsbusiness strategy (Hunt & Lambe, 2000).

A recent definition of market orientation as “the set ofcross-functional processes and activities directed at creatingand satisfying customers through continuous needsassessment” (Deshpandé and Farley 1998) establishes a generalpattern between market orientation and various measures ofbusiness performance. Within it there is an implicitacknowledgment that becoming market oriented involves real



investment in a set of capital-intensive processes and activities.In addition, the key to success for a business firm is seen asdetermining the needs and wants of customers and satisfyingthese needs more effectively than the competition.

Market orientation also takes into account competitors’moves by sharing information about competitive forces to determarket positional erosion (Day and Wensley 1988; Peteraf andBergen 2003). Market-oriented firms follow specific andidentifiable routines and processes, such as generatinginformation about customers through monitoring and assessingtheir changing needs and wants. Disseminating that informationthroughout the firm, and revising business strategies to enhancecustomer value (Kohli and Jaworski 1990; Narver and Slater 1990).

Peters (1984) summed up this approach by assertingthat a firm needs only three truly distinctive “skill packages” tosucceed:

1. a focus on total customer satisfaction (a component ofmarket orientation),

2. a focus on continuous innovation (i.e.,innovativeness), and

3. a common denominator whereby employees of the firmare well trained to share the importance of the first twocapabilities.

Market orientation has traditionally been perceived asa static dimension. It is perceived as yet another differentiatingcompetency, another function that all organizations must adopt.Companies are focused on increasing their understanding thecustomers, consumers and the environment among othermarketing dimensions like research, media habits etc. In a complexand intensely competitive market environment as it currentlyexists, stand-alone MO is insufficient and more value can bedelivered to the customers and the goal of achieving sustainablecompetitive advantage SCA can be pursued by a more dynamicapproach.



One such theory that aims at making MO a moredynamic concept aims at complementing the process of beingmarket driven with the approach of ‘driving the market” i.e.influencing all the players to the advantage of the business.Market behavior can be modified directly or, alternatively,indirectly by changing the mind-set of market players. Thebest examples of the latter are AMAZON that attempts todrive the market by offering a large array of items on the webthus transforming the industry, or DELL that has driven themarket by eliminating the retailer from the computer business.Jaworski, Kohli and Sahay(1990), opine that “there are twocomplimentary approaches to market orientation—a market-driven and a driving-markets approach. Although bothapproaches represent a market orientation that entails a focuson customers, competitors, and broader market conditions.

They further argue that the literature has anunbalanced focus on keeping the status quo (e.g., existingcustomer preferences, current market structure) as comparedto proactively shaping customers and/or the market. Theirconceptual framework is illustrated in the following diagram(Figure 1). It provides an overview of the conceptualframework. The framework is composed of two dimensions:market structure and market behavior. Market (or industry)structure refers to a set of players and the roles played bythem in what Porter (1985) calls “the value chain.” Marketbehavior refers to the behavior of all players in the industryvalue chain.



Kohli et al. term “market driven” as learning,understanding, and responding to stakeholder perceptions andbehaviors within a given market structure. In contrast, the term“driving markets” refers to changing the composition and/orroles of players in a market and/or the behavior(s) of players inthe market (Jaworski, Kohli and Sahay, 2000). They concludethat well-performing companies although able to manage thepresent through short-term, market driven actions , should, alsosimultaneously, consider how to reshape markets by driving theminto new competitive spaces.

A different approach to making MO a dynamic concepthas been suggested by other researchers (Bulent and,Seigyoung2006). They argue that the effect of market orientation on a firm’sperformance is strengthened when market orientation is bundledtogether with internal complementary resources, such asinnovativeness. This approach is based on the assumptionsstated by both Day (1994) and Hunt and Morgan(1995), that not

Figure 1



all firms are able to generate and sustain competitive advantagesby implementing market orientations only.

For the purpose of their study, Bulent et al. consideredmarket orientation as a higher order construct of customerorientation, competitor orientation, and inter-functionalcoordination (Narver and Slater 1990). After defining a dynamiccapability as the integration of two focal constructs (or firm-level resources): market orientation and innovativeness, theyhypothesized that “ when a high level of market orientation isbundled together with high innovativeness, it creates a dynamiccapability that enables firms to enhance firm performance.”

Taking Australian business as their target, theyselected CEOs and senior managers of 750 firms representingthe sectors of food, mining, automotive, construction materials,and chemicals, receiving 242 completed forms that formed thebasis of the research.

They operationalized market orientation as amultidimensional construct that comprised customer orientation:(6 items), competitor orientation (4 items),, and interfunctionalcoordination (5 items), measured with 5-point, Likert-type scales(1 = strongly disagree, 5 = strongly agree) taken from Narverand Slater (1990). Firm-level innovativeness (5 items) and firmperformance (8 item) was measured with 5- point, Likert-typeformative scale (1 = much worse, 5 = much better) taken from Liand Atuahene-Gima (2001).

Managers were asked to assess their perceptions offirm performance on each indicator relative to their principalcompetitors over the past 3 years (i.e., return on investment,return on sales, return on assets, sales growth, market-sharegrowth, profit growth, cash flow from market operations, andprofitability). Earlier research had demonstrated statisticallysignificant correlations between perceptual measures and theircorresponding objective measures of performance (e.g., Pearce,Robbins, and Robinson 1987), indicating that perceptual ratingsof performance can be considered as reliable indicators.



The following chart (Figure2) summarizes the findingsof their (Bulent ,Seigyoung, 2003) hypothesis testing. Thehypothesis posits that at a high level of firm innovativeness, themarket orientation–firm performance relationship will be stronger.They found interaction between market orientation andinnovativeness to be related significantly and positively to firmperformance, supporting the hypothesis.

Figure 2 (bundling together of market orientation with highinnovativeness leads to higher performance.)

They conclude that innovativeness as a criticalcomplementary capability that, when coupled with marketorientation, will enhance the impact of market orientation on theorganization’s performance.

This research was limited to the manufacturing sectoronly and did not cover non-profit organizations and the servicessector.

For a company to become market oriented it mustdevelop a set of capabilities and processes that requireinvestment thus raising the issue of what is the appropriate



level of market orientation that it should acquire?

Bteinman, Deshpande and Farley(2000) propose thatthe appropriate level of market orientation is what the customerthinks it should be. They further opine that the essence of marketorientation is the successful management of a relationshipbetween suppliers and customers. (Christine, Rohit andFarley.2000). They have examined the overlap of marketorientation and relationship marketing by employing the social-psychological framework of social identity theory (Tajfel andTurner 1979).

The method used by this study involved a matchedset of buyer-seller pairs as illustrated in Figure 3. below.

The method used by this study involved a matchedset of buyer-seller pairs as illustrated in Figure 3. below.



They called their sampling unit as a “quadrad”, i.e. acombination of two buyer-seller dyads. Each quadrad isconstructed from a set of four interviews, two from a supplierand two from a customer firm of that supplier. The method allowedcomparisons of supplier and customer perspectives that werecrucial to the researchers’ concept of market orientation gaps.

The researchers used two classes of measures formarket orientation:

(1) Actual (what the supplier says about his or her ownmarket orientation, and what the customer says about it) (2) Thenormative market orientation gap (which correspondingly dealswith what suppliers and what customers think norms shouldbe). They used nine items that comprise each of the scales fromDeshpandé et al. (1993

They have tested 3 sets of hypotheses in this contextwhich are as follows:

Hypothesis 1a: The longer the relationship, the smallerthe actual market orientation gap.Hypothesis 1b: The longer the relationship, the smallerthe normative market orientation gap.Hypothesis 2a: The more important the relationship,the smaller the actual market orientation gap.Hypothesis 2b: The more important the relationship,the smaller the normative market orientation gap.Hypothesis 3a: The actual market orientation gap willbe smaller in collectivist cultures (e.g., Japan) than inindividualist cultures (e.g., the United States).Hypothesis 3b: The normative market orientation gapwill be smaller in collectivist cultures than in individualistcultures.

They also propose the concept of the market orientationgap, which is the difference in measured perceptions betweencustomers and suppliers on how market oriented the suppliersare.



The U.S. and Japanese samples of firms selected forpersonal interviews were a random sample of firms listed on theNew York and the Nikkei stock exchanges. Two marketingexecutives of each supplier firm were interviewed.

Each supplier respondent was asked to name up tothree important customers form which one customer firm waschosen at random.

The research concluded that:

1.Suppliers and customers do disagree about thesupplier’s market orientation, i.e. a market orientation gapdoes exist.

2.Suppliers think significantly better of themselvesthan their customers do for both the actual andnormative measures.

3.The normative gap decreases significantly asrelationship length increases (hypothesis 1b).

4.The normative gap decreases significantly asrelationship importance increases, i.e. as the supplierbecomes more important to the customer (hypothesis2b).

5.The correlation between actual market orientationgap and relationship length (hypothesis 1a) andrelationship importance (hypothesis 2a), while notsignificant, is directionally correct.

6. In the relatively collectivist culture of Japan, wherethere is more of a “we” and less of an “us versusthem” culture, both the actual and normative marketorientation gaps are smaller than in the unitedstates(hypothesis 3),



In summary this very interesting study concluded:

1.That a market orientation gap exists, as suppliersevaluate their own market orientation as being athigher level than do their important customers in ab2benvironment.

2. This gap is proportional to the length and importanceof the relationship.

3.The gap is smaller in a collectivist culture (Japan) thanin an individualist culture (USA).

Quality of products and services has a direct effect onthe market performance and profitability of a firm. Quality guruslike Crosby (1979) have asserted that a company’s performancecould be improved by focusing on product quality. Firms acrossthe globe have embraced the TQM concept as a pathway todeliver superior performance. The development of the concept of“quality context” (Benson, Saraph, and Schroeder).

1991; Saraph, Benson, and Schroeder (1989) relate toprocedures and practices in a firm that encourage it to produce abetter quality product or service. Market orientation is the processof effectively collecting, disseminating, and responding toinformation that will enhance the marketing function and hencethe firms performance within the organization. P. S. Raju andSubhash C. Lonial(2001) examine the relationships of theseconstructs to a firm’s performance.

Raju et al. opine that MO offers a parsimoniousframework for understanding the relationship of the quality contextand performance. They propose a conceptual framework for therelationships between quality context, market orientation, andorganizational performance. This is shown in figure 4, which issimilar to the Johnson and Gustafsson (2000) framework. In thisproposed framework, both quality context and market orientationhave independent direct effects on a firm’s performance.



Figure 4

A total of 293 questionnaires were received from theservice sector in the USA filed in by CEOs. Market orientationwas measured with the modified MARKOR scale developed byKohli, Jaworski, and Kumar (1993). Responses to the items weremeasured using a 5-point Likert-type scale, ranging from 1(strongly disagree) to 5 (strongly agree). Their quality contextwas measured using the instrument designed by Benson,Saraph, and Schroeder (1991) using only 19 out of the original26 items to measure the five dimensions of quality context.Following Benson, Saraph, and Schroeder (1991), the responsesto these items were measured on a 5-point scales, ranging from1 very low) to 5 (very high). The firm’s performance wasmeasured using judgmental measures since there is considerableevidence of the use of such measures of organizationalperformance ; Jaworski and Kohli, 1993; ; Narver and Slater1990).

In earlier MO studies the research findings andinterpretation of results persuaded the researchers to modifytheir conceptual construct as given in the Figure 5.



Figure 5

A major implication of this research (P. S. Raju andSubhash C. Lonial.2001) is the realization that as quality contextinfluences performance through its effect on market orientationmanagers in the service sector should aim towards following amore holistic marketing concept by improving the coordinationbetween the quality and marketing functions within their firms.This hypothesis needs to be validated in the FMCG area as theintrinsic nature of a manufacturing firm is different from theservice company in respect of the quality context.

Although market orientation has been very widelystudied since its introduction as a concept in the 1990s, its rolein driving strategy (and subsequently performance). Jaworskiand Kohli (1993) have not been properly explored. Based onthis assumption Brooke Dobni and George Luffman(2003)theorized that the “ scope of a market orientation needs to beconsidered within a holistic manifestation for it to havemanagerial implications”. Their view was based on theconclusion reached by the researchers that a market orientationfacilitates strategy implementation in an organization.

As a result they hypothesized that “There is a palpablerelationship between behaviors, actions, and outcomes inrespect to the competitive context; specifically the degree of



adherence to the specific requirements of the environment inmarket orientation and strategy profiles will be significantlyrelated to performance.” (Brooke Dobni and George Luffman2003).

The researchers developed 61 underlying measurementconstructs of behavior and 15 differential statements to measurecompetitive context. These constructs were derived fromstudying American corporations over the past 20 years whichare believed to be the ones most representative of the factorsthat they are trying to measure. Based on these constructs theresearchers developed a theoretical model given below thatconsiders the relationships between behavior (marketorientation), action (marketing strategy), and outcome (returnon investment).

Figure 6.



Research was conducted amongst the 7 regional Belloperating companies of USA that were created out of the anti-trust suit against the giant AT&T. This is a dynamic high-technology industry, characterized by rapid product and serviceintroduction rates, intense competition and high technologicalobsolescence. 210 completed questionnaires were obtained fromthe SBUs. The questionnaire covered 61 MO behaviors(representing 7 MO factors), 22 marketing strategy practices ofthe SBU (representing four strategy orientations), and 15situational context statements (relating to three competitivecontext factors). Likert-type scales and semantic differentialswere used to measure MO and strategy profiles. Actual andrelative levels of ROI were also probed.

The research findings validate the theoretical modeland support the proposition that there are ideal marketorientation and strategy profiles. The researchers haveconcluded that the scope and impact of a market orientation onstrategy implementation and performance may be more farreaching than they originally thought and market orientationcan play a more directed role in strategy implementation.

The primary challenge of this research was to determinestrategy profile patterns in a holistic environment and this hasbeen achieved as shown in Figure 6. However there is a limitationof testing in one industry however complex and competitive,and it needs to be validated in a multiple business segment bothfor the services and FMCG sectors. This research has providedsome preliminary insight into the domain of human behaviorthat has played a role in achieving superior performance andcan lead to exploration of relationship between HR practices,Leadership profiles and MO.

Market Orientation in Pakistan

As a preliminary measure of the application of marketorientation theory to the Pakistani environment we decided totake a dipstick measure of the local marketing companies. Basedon the assumption, which is substantiated by our review of



available researches, that marketing orientation is a necessarycondition for a successful business we developed the followingHypothesis:

“The Practice of marketing orientation has a positiveimpact on the performance of successful companies in Pakistan “.

Methodology

From amongst the population of companies marketinggoods and services in Pakistan our basis of sample selectionwere two: a) companies that are selling products and servicesthat are widely accepted by the consumers/customers and b)financial success as evidence of their marketing success, for allcommercial business exist to make profits only. Our target samplewas Pakistani companies both in the services and FMCG areas.Our criteria of “success’ was continued profitability for theprevious 3 years. Since it is not always possible to obtain actualprofit figures for some companies we approached the companieswith opening questions as to their continued profitability forthe previous three years and only companies that answered inthe affirmative were included. The answers were obtained frommarketing personnel in senior positions.

The 27 item questionnaire was pretested amongst afew (10) companies picked at random, to check for theappropriateness of the responses and some questions weremodified for clarity.

The survey was conducted in the form of a personalinterview which enabled the respondents to feel comfortableand answer all the 27 questions as objectively as possible.

The questionnaire designed by Dobni et al. to measurethe relationship between MO , marketing strategy and ROIincluded 61questions regarding market-oriented behaviors(representing seven market-oriented factors), 22 questions onmarketing strategy practices of the SBU (representing fourstrategy orientations), and 15 questions on situational context



statements (relating to three competitive context factors). Thisis a very elaborate model based on their complex model designas discussed above.

The (Bulent ,Seigyoung(2003) conclusion that highlevel of innovativeness is a factor of high market orientationwas achieved by a simpler method containing fewer questions,that operationalized market orientation as a multidimensionalconstruct that comprised only15 items: Customer orientation(six items), competitor orientation (four items), andinterfunctional coordination (five items).

We decided not to use Dobni et al.’s complex structureas our investigation into Pakistan’s market orientation is of apreliminary nature and the profitability of the companiessurveyed was checked upfront whilst choosing them. Also takinga cue from early research on market orientation (Kohli andJaworski (1990) that used a simple construct and adoption of asimilar simple construct by Bulent et al. we also decided to keepour method simple.

Based on our experience with the Pakistani market wedefined market orientation as a construct of Competitororientation (5 items), Customer orientation (7 items), Marketanalytical orientation (10 items) and Company culture (3 items).We also added the factor of Innovation to our questionnaireconstruct (2 items). These 27 items were measured which arelisted in Figure 7. The answers were a simple “yes” or “no”option. A total of 120 usable respondents were gathered out of130 interviews.



Q1 The company has a Customer Service department Q2. Does the company maintain a database of its Suppliers? Q3. Customer feedback forms are placed in products sometimes Q4. Is the Marketing Mgr involved in the research process?

Q5. The company improves its products regularly each year Q6 Do you do a SWOT analysis for your competitors? Q7 Company maintains a database about its markets Q8 Do your customers contact the company frequently?

Q9 The company has a separate market research department Q10 Do you undertake a formal brand audit each year? Q11 Marketing managers visit customer’s premises regularly

Q12 Company purchases market research information from surveys etc. Q13 Company holds seminars where innovations are discussed Q14 Does the company maintain a database of its competitors? Q15 The company managers visit markets each month Q16 Company managers visit market shops etc. regularly Q17 Information about customers/markets is available to all employees Q18 Does the company maintain a database of its consumers? Q19 Is the health of your brand measured against competitors?

Q20 Customers are encouraged to visit company facilities Q21 Employees from areas other than marketing also visit markets

Q22 Company encourages formal customer feedback regularly Q23 Is your brand equity stronger than your competition? Q24 Do you do a SWOT analysis for each brand each year? Q25 The company undertakes market research regularly Q26 Company managers visit consumer homes sometimes Q27 Do you measure your product quality against competition?

Figure 7:



Results

Our results do not support the hypothesis that “ThePractice of marketing orientation has a positive impact on theperformance of successful companies in Pakistan”. We had setthe standard, based on our experience of Pakistan’s marketingenvironment, that if 80% of the respondents, within each of the 5categories of market orientation behaviors, answer in theaffirmative to the questions asked, then it would be consideredthat the market is following that behavior. Thus we find that thebehavior of market orientation is not linked to the profitability ofcompanies in Pakistan.

The composition of 120 companies that participated inthe study covers a fair cross-section of Pakistani and multinationalcompanies as given in (Figure 8) below :

Both the services sector and consumer goods industrywere adequately represented in our study shown in (Figure 9)below.



The composition of industries covered in our study isgiven in Figure 10. The composition of participants given inFigures 8-10 reflects the willingness of companies to participatein this study and was not part of the research design.

Based on this study it can be concluded that successfulPakistani business are best at keeping track of what theircompetitors are doing in the category. Because competitorsessentially target the same segments that interests a companyPakistani business are always benchmarking their performanceagainst that of its competitors and 85% of the respondents inthis category evidenced this Market Orientation behavior.

None of the other 4 categories of market orientationbehavior could meet the standard set by researcher, that each ofthe 5 categories should achieve a positive answer of 80%, whichleads us to conclude that market orientation does not play a bigrole in the success and profitability of Pakistani companies. Thisleads the researcher to opine that perhaps other factors such asmonopolistic tendencies, protectionism, lack of consumerawareness etc. may be contributing more to the profitability ofsuccessful companies in Pakistan and can form a basis of furtherresearch in this area.



Customer orientation comes out as the second bestbehavior of Pakistani firms in our research as 77% of therespondents evidenced this behavior. This is more pronouncedin the goods category and the services and industrial sectorsperformed relatively poor here.

The third ranking behavior was of innovativeness and75% of the companies affirmed their commitment to this trait ofmarket orientation. Bringing new products and services to themarket is not lacking but there is an absence of awareness of aneed to inculcate a culture of innovation in the companies thatcan improve their performance in the marketplace.

Only 66% of the companies responded positively tothe category of having an employee culture to enable thecompanies deliver better value to their customers. This accordingto our research shows a lack of holistic marketing approach inPakistan that holds back the coming into play of all employeesother than marketing personnel and it can be said that companiesin Pakistan are still myopic in their marketing behavior.

Market analysis which was once considered the solecriterion of being market oriented comes out as an inadequatebehavior of Pakistani companies as only 64% of the companiesanswered positively to this category of market orientationbehaviors. This reflects a belief in inside-out approach ratherthan the contemporary outside-in approach to marketing thatcan lead to success.



Construct Questions yes no COMPETITORS ANALYSIS Q6 Do you do a SWOT analysis for your competitors? 107 13

Q14 Does the company maintain a database of its Competitors? 95 25 Q19 Is the health of your brand measured against competitors? 103 17 Q23 Is your brand equity stronger than your competition? 92 28 Q27 Do you measure your product/service quality against competition? 112 8

CUSTOMER SERVICE Q1 The company has a Customer Service department 102 18

Q3. Customer feedback forms are placed in products sometimes 60 60 Q8 Do your customers contact the company frequently? 94 26 Q18 Does the company maintain a database of its consumers? 94 26 Q20 Customers are encouraged to visit company facilities 75 45 Q22 Company encourages formal customer feedback regularly 106 14 Q2. Does the company maintain a database of its Suppliers? 116 4

EMPLOYEE CULTURE Q4. Is the Marketing Manager involved in the research process? 102 18

Q17 Information about customers/markets is available to all employees 60 60 Q21 Employees from areas other than marketing also visit markets 74 46

INNOVATION Q5. The company improves its products regularly each year 106 14 Q13 Company holds seminars where innovations are discussed 75 45

MARKET ANALYSIS Q7 The company maintains a database about its markets 110 10 Q10 The company conducts a formal brand audit each year 70 50 Q9 The company has a separate market research department 37 83 Q11 Marketing managers visit customers premises regularly 83 37 Q12 Company purchases market research information from surveys etc. 78 42 Q15 The company's managers visit markets each month 95 25 Q16 The company’s managers visit market shops etc. regularly 81 39 Q24 Do you do a SWOT analysis for each brand each year? 89 31 Q25 The company undertakes market research regularly 95 25 Q26 The company's managers visit consumer homes sometimes 34 86

A summary of the answers obtained in each category is given in Figure 11 below.



Discussion

This research raises some interesting questions in thearea of marketing in Pakistan. The main question is “what arethe success factors for marketing companies if they are not sostrong on their market orientation behavior ?” Is this lack ofmarketing orientation holding up the expansion of companiesto larger success within the country and through globalexpansion? And most importantly it raises the issue of “whatkind of marketing culture exists in Pakistani companies and howdoes it compare with global marketing cultures” ? All theseinteresting issues can form the basis of further research. Aserious limitation of this study was the simple construct of thequestionnaire. Future studies need to use a more robustmethodology that would enable statistical analysis which wouldexplain the marketing orientation of Pakistani companies in yetbetter perspective. Follow up research is needed to develop anMO scale for Pakistani business on the pattern of similar effortsmade for other markets globally. This would also enable acomparative analysis of the state of marketing practices inPakistan .

Acknowledgement

The researcher wishes to record the patient support ofDr. Javed Akbar Ansari whose supportive comments and criticalcontributions were of great help in the preparation of this paper.

References

1. Bernard Jaworski, Ajay K. Kohli and Arvind Sahay.2000.Market-Driven Versus Driving Markets. Journal of theAcademy of Marketing Science ; 28; 45.

2. Bulent Menguc and Seigyoung Auh.2006. Creating a Firm-Level Dynamic Capability through Capitalizing on MarketOrientation and innovativeness. Journal of the Academyof Marketing Science ; 34; 63.



3. Christine Steinman, Rohit Deshpande and John U.Farley.2000. Beyond Market Orientation: When Customersand Suppliers Disagree. Journal of the Academy ofMarketing Science ; 28; 109.

4. P. S. Raju and Subhash C. Lonial.2001. The Impact of QualityContext and Market Orientation on OrganizationalPerformance in a Service environment. Journal of ServiceResearch ; 4; 140.

5. C. Brooke Dobni and George Luffman.2003. Determining thescope and impact of market orientation profiles on strategyimplementation and performance. strategic managementjournal : 24: 577-585 .

6. Christian Homburg, John P. Workman, Jr. and Ove Jensen.2000.Fundamental Changes in Marketing Organization: TheMovement Toward a Customer-Focused OrganizationalStructure. Journal of the Academy of Marketing Science ;28; 459.

7. William E. Baker and James M. Sinkula. 1999. The SynergisticEffect of Market Orientation and Learning Orientation onOrganizational Performance. Journal of the Academy ofMarketing Science 27; 411.

About the author

Samin Ahmad is an Associate Professor in Marketing departmentat the Institute of Business Management. He has over 30 yearsof industry experience in the field of Marketing and Supply-chain and has adopted teaching marketing as a secondprofession.

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Market Orientation in Pakistani Companies