Market orientation
Market orientation perspectives include the decision-making perspective (Shapiro, 1988), market intelligence perspective (Kohli and Jaworski, 1990), culturally based behavioural perspective (Narver and Slater, 1990), strategic perspective (Ruekert, 1992) and customer orientation perspective (Deshpande et al., 1993). The two most prominent conceptualizations of market orientation are those given by Ajay Kohli and Bernie Jaworski (1990) and Narver and Slater (1990). While Kohli and Jaworski (1990) consider market orientation as the implementation of the marketing concept, Narver and Slater (1990) consider it to be an organizational culture. Kohli and Jaworski (1990) defined market orientation as ""the organization-wide generation  of market intelligence, dissemination of the intelligence across departments and organization-wide responsiveness to it"". According to them, the marketing concept is a business philosophy, whereas the term market orientation refers to the actual implementation of the marketing concept. They added that "a market orientation appears to provide a unifying focus for the efforts and projects of individuals and departments within the organization." On the other hand, Narver and Slater (1990) defined market orientation as "" the organization culture that most effectively and efficiently creates the necessary behaviours for the creation of superior value for buyers and, thus, continuous superior performance  for the business"". As such, they consider market orientation to be an organisational culture consisting of three behavioral components, namely, i) customer orientation, ii) competitor orientation and iii) interfunctional coordination; and two decision criteria, namely, iv) long-term focus, and v) profitability. However, during the scale validation process, the items for long-term focus and profitability did not meet the reliability criteria and were removed. Empirical study found that among all three behavioral components, interfunctional coordination, especially those between R&D and marketing has the most significant influence on new product success. The shifting source of competitive advantage. Niraj Dawar argues  that competitive advantage is shifting from a firm’s “upstream activities” such as sourcing, production, logistics and product innovation to “downstream activities”. In doing so, Dawar expands on the notion of market orientation: Instead of bringing better products to market or increasing operational and asset efficiencies, downstream activities focus instead on what else the firm can do for the customer: The core focus of the business has tilted from product and production, to customers and the market. Thus, competitive advantage exists externally to the firm, enabling the company to build lasting differentiation by creating new forms of customer value. Consequently , it is the firm’s perceived position in the eyes of the customer that matters, in the context of shifting purchase criteria, and not product innovation. Customer perceptions can be shaped through an increased focus on building trust, changing the customer’s purchasing criteria and defining the competitive set. By also tailoring the offering to specific consumption circumstances and reducing customer costs and risk, value is created for customers through downstream innovation. Finally, the firm can build accumulative competitive advantage from network effects and also by accumulating and leveraging customer datasets. Market orientation plays a critical role in marketing strategy . As reported by Cacciolatti & Lee (2016), market oriented firms are learning organisations and "'information and knowledge are important resources that enable the organisation to make better decisions. [...] Hence, market orientation becomes a fundamental characteristic of the learning organisation. While MO is considered as an antecedent of performance (Moorman & Rust, 1999; Verhoef et al., 2011), MO may play a moderating role in the use of marketing capabilities, as market oriented firms tend to develop more effective capabilities (Zhou & Li, 2010; Smirnova et al., 2011). MO is also conceptualised as an antecedent to some capabilities (Nasution et al., 2011), although there is  no conclusive evidence to suggest whether MO moderates the relationship between capabilities and performance, or rather capabilities play a mediating role between MO and performance"'. Cacciolatti & Lee (2016) proposed a novel resource-advantage theory based framework that builds on marketing capabilities and shows how they have an effect on firm performance. The capabilities-performance model proposed by Cacciolatti & Lee (2016) illustrates the mechanism whereby market orientation, strategic orientation, and organisational power moderate the capabilities-performance relationship. According to their model, market orientation moderates the relationship between capabilities and performance in an organisation. In particular, market orientation interacts with innovation and  collaboration capabilities indicating that market oriented organisation perform better when they have learnt to be innovative and there is inter-departmental collaboration. The same model shows that market oriented firms have a stronger strategic orientation that looks both at the short and long term. Measurement scales. In order to measure market orientation, the two most widely used scales are MARKOR and MKTOR The MKTOR scale is a 15-item, 7-point Likert-type scale, with all points specified. In this measure, market orientation is conceptualised as a one-dimensional construct, with three components, namely: customer orientation, competitor orientation, and interfunctional  coordination. The simple average of the scores of the three components is the market orientation score. On the other hand, the MARKOR scale is a 20-item, 5-point Likert scale, with only the ends of the scale specified. Here market orientation is again composed of three components, namely: intelligence generation, intelligence dissemination, and responsiveness.