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Market orientation and performance of export ventures: the process through marketing capabilities and competitive advantages

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Abstract

Our study focuses on the internal process through which market orientation influences performance in export markets, and develops a model of market orientation–marketing capabilities–competitive advantages–performance relationships. Using survey data of 491 export ventures based in China, we find that marketing capabilities mediate the market orientation–performance relationship, while competitive advantages partially mediate the marketing capabilities–performance relationship. Moreover, coordination mechanism strengthens, and cost leadership strategy weakens, the effects of market orientation on new product development and marketing communication capabilities, respectively. Market turbulence attenuates the effect of market orientation on new product development capability while competitive intensity strengthens this effect.

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Authors and Affiliations

  1. Department of Marketing, SSB 458, University of Missouri-St. Louis, One University Boulevard, St. Louis, MO, 63121-4499, USA

    Janet Y. Murray

  2. Department of Marketing, SSB 1303, University of Missouri-St. Louis, One University Boulevard, St. Louis, MO, 63121-4499, USA

    Gerald Yong Gao

  3. The Fox School of Business, Temple University, 1801 Liacouras Walk (006-14), Philadelphia, PA, 19122, USA

    Masaaki Kotabe

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  1. Janet Y. Murray
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Correspondence to Janet Y. Murray.

Appendix

Appendix

Measurement items

 

Loading a

Market Orientation (5 = strongly agree, 1 = strongly disagree)

Export Intelligence Generation CR b = .87, AVE c = .62

1. We periodically review the likely effect of changes in our export environment (e.g., technology and regulation).

.67

2. In this company, we generate a lot of information concerning trends (e.g., regulation, technological developments, politics, and economy) in our export markets.

.93

3. We generate a lot of information in order to understand the forces that influence our overseas customers’ need and preferences.

1.00

4. We constantly monitor our level of commitment and orientation to serving export customer needs.

.76

5. We are slow to detect fundamental shifts in our export environment (e.g., technology, regulatory, economy). (dropped)

 

Export Intelligence Dissemination CR = .86, AVE = .68

1. Information about our export competitors’ activities often reaches relevant personnel too late to be of any use. d

.77

2. Important information concerning export market trends (regulatory, technology) is often discarded before it reaches decision makers. d

.96

3. Too much information concerning our export competitors is discarded before it reaches decision makers. d

1.00

4. Information that can influence the way we serve our export customers takes forever to reach export personnel. d

.91

5. Important information concerning our major export customers is disseminated right down to the shop floor. (dropped)

 

Export Intelligence Responsiveness CR = .91, AVE = .64

1. If a major competitor were to launch an intensive campaign targeted at our foreign customers, we would implement a response immediately.

.91

2. We are quick to respond to significant changes in our competitors’ price structures in foreign markets.

1.00

3. We rapidly respond to competitive actions that threaten us in our export markets.

.96

Marketing Capabilities (5 = strongly agree, 1 = strongly disagree)

Relative to your firm’s major competitors:

Pricing Capability CR = .80, AVE = .56

1. We respond quickly to competitors’ pricing tactics.

1.00

2. We use pricing skills to respond quickly to any customer change.

.99

3. We communicate pricing structures and levels quickly to customers

.98

New Product Development Capability CR = .87, AVE = .73

1. We manage new products for export well.

.77

2. We develop new products for export to exploit R&D investment.

.80

3. We speedily develop and launch new products for export.

1.00

4. We manage overall new product development systems for export market well.

.84

5. We successfully launch new products for exports.

.98

Marketing Communication Capability CR = .93, AVE = .81

1. We skillfully use marketing communications.

.94

2. We use marketing communication skills and processes well.

1.00

3. We effectively manage marketing communication programs.

.91

Competitive Advantages (5 = much higher, 1 = much lower)

Relative to your firm’s major competitors:

Lower-cost Advantage CR = .83, AVE = .62

1. Production cost per unit. d

.97

2. Selling price to end-users overseas. d

.54

3. Channel margins given.

1.00

Differentiation Advantage CR = .88, AVE = .72

1. Brand awareness.

.97

2. “Share of mind”.

.81

3. Brand personality.

1.00

Internal Factors (5 = strongly agree, 1 = strongly disagree)

Coordinating Mechanism CR = .91, AVE = .64

1. Employees responsible for Product A’s exports and those in other functional areas help each other out.

.80

2. In our company, there is a sense of teamwork.

.96

3. There is a strong collaborative working relationship between those who are responsible for Product A’s exports and those who do not.

.98

4. Functional areas in this company work together in the same direction.

1.00

5. The activities of our business functions (e.g., marketing/sales, manufacturing etc.) are integrated in pursuing in a common goal.

.98

6. We resolve issues and conflicts through communication and group problem-solving.

.88

Cost Leadership Strategy CR = .74, AVE = .59

Your firm’s international strategy for Product A in its export markets can be described as

1. having lower costs for Product A than our major competitors.

.68

2. achieving economies of scale for Product A.

1.00

External Factors (5 = strongly agree, 1 = strongly disagree)

Market Turbulence CR = .74, AVE = .60

1. Our export customers’ product preferences change quite a bit over time.

.72

2. Our export customers tend to look for new products all the time.

1.00

Competitive Intensity CR = .82, AVE = .60

1. Competition in our export market is cutthroat.

.74

2. There are many “promotion wars” in our export market.

1.00

3. Anything that one competitor can offer in our export market, others can match readily.

.97

4. Price competition is a hallmark of our export market.

.89

5. One hears of a new competitive move in our export markets almost every day.

.95

Control Variable (5 = strongly agree, 1 = strongly disagree)

Psychic Distance CR = .87, AVE = .70

1. The difference in the culture of our export customers.

.84

2. The difference in the customs and values of our export customers.

.97

3. The difference in the language of our export customers.

1.00

Performance

Export Performance (5 = strongly agree, 1 = strongly disagree)

Financial Performance CR = .78, AVE = .55

1. has been very profitable.

.65

2. has generated a high volume of sales.

.87

3. has achieved rapid growth.

1.00

Strategic Performance CR = .88, AVE = .71

4. has improved our global competitiveness.

1.00

5. has strengthened our strategic position.

.94

6. has significantly increased our global market share.

.95

Product Performance CR = .85, AVE = .66

Compared with three major competitors (5 = much higher, 1 = much lower)

1. number of successful new products.

98

2. speed of getting new products to the market.

1.00

3. product innovations.

.81

Overall Model Fit: χ2(943) = 1905.77, p < .00; GFI = .86, TLI = .92, CFI = .93; RMSEA = .05.

  1. aFixed factor loading
  2. bComposite reliability
  3. cAverage variance extracted
  4. dItems are reverse-coded

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Murray, J.Y., Gao, G.Y. & Kotabe, M. Market orientation and performance of export ventures: the process through marketing capabilities and competitive advantages. J. of the Acad. Mark. Sci. 39, 252–269 (2011). https://doi.org/10.1007/s11747-010-0195-4

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